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I am pretty bad with these puns. But this one might just be SSC-worthy.

One of my goals for the rest of Anti-Bolshevik Month is to write a comprehensive alternate history in which the Russian Republic survives WW1.

Randall Parker’s question on Twitter: “Imagine a time traveler goes back to 1913 and kill Hitler, Stalin, Lenin, Trotsky, Gavrilo Princip and a few others. How does 20th century play out?

Gave me a convenient opportunity to sketch out the basics: “If you study the details, success of both October Revolution & Nazi ascent were almost freak occurrences. Moreover, latter depended on the former. Very unlikely to repeat. There might not have been a WW1, and not just Pinkerian reasons, but Realpolitik ones. Russian power was rapidly converging to German, making two front war increasingly untenable; hence, German General Staff urged war sooner, before 1916 at the latest. USA and Russia would dominate mid to late 20th century, and more equally; a China on S. Korea’s development trajectory would be surpassing both ~2000 (instead of Russia in 1990 and the US around ~2030 in our TL). Tech in general might be about a decade further advanced, though rocketry might lag slightly. But global warming also worse, since Communism wouldn’t have retarded many countries’ development.

In other news, Andy Weir, the guy who wrote The Martian, now has a new sci-fi book “Artemis” about a 2,000 population lunar base in the late 21st century.

Anyone read it? Is it any good?

Tolkien’s son resigns as director of the Tolkien estate. Hopefully the days of capricious copyright exploitation are coming to an end. Film adaptation of The Last Ringbearer when?

Main

* Top 500 supercomputer list for November 2017 is out.

Although China first overtook the United States in June 2016 by the smallest of margins, for the first time the gap has become truly significant: China – 202; United States – 143.

As per usual, Russia has a grand total of around 3, because the Putin regime prefers the Rotenbergs to R&D.

poland-death-march

* Inspirational imagery from the Polish nationalist march in Warsaw. Vincent Law attended and has a good writeup.

Much more impressive than the sad affairs that pass for such in the Trumpreich and the Putlerreich. But long-term prospects are mixed, at best.

* Lubos Motls: Bitcoin congestion singularity may be coming. Can’t really serve as a normal means of exchange if a single transaction costs you several cups of coffee.

* spandrell: Biological Leninism.

* Scott Alexander: Book Review: Legal Systems Very Different From Ours

They feared that a written law code generally available would lead to rules lawyering and supported unequal treatement based on the unequal status of those to whom the law applied…Some early writers argued against making the law code publicly available. …

Where the offense did not seem to fit any category in the code, the court felt free to find the defendant guilty of doing what ought not to be done or of violating an Imperial decree — not an actual decree, but one that the Emperor would have made had the matter been brought to his attention.

The sections on China were fascinating – it was the definition of Kafkaevschina. And the same order prevailed at the end of the Qing dynasty.

byzantine-culture-world

* Caitlyn Green with a world map of where Byzantine artifacts have been found.

* Gerald Clare: The Forgotten Dream of a Russian Africa

* Alt Left podcaster Robert Stark has a book out, Journey to Vapor Island. B.W. Rabbit reviews it.

Russia

* Russian rearmaments program from 2018-2027 is, at 19 billion rubles, virtually equal to that for the period 2011-2020.

Adjusting for inflation, this translates into a massive cut to military spending.

* New VCIOM poll: While Putin’s approval remains high, indicators of social dissatisfaction nearing the heights they reached around late 2011, when mass protests kicked off.

* Patrick Armstrong: RUSSIAN FEDERATION SITREP 16 NOVEMBER 2017

So now RT America is a “foreign agent“. (Remember all the faux outrage about Russia’s FARA imitation law? No? But it was only a year ago: “Russia: Four years of Putin’s ‘Foreign Agents’ law to shackle and silence NGOs“. Hard to keep up, isn’t it?) In case you think this reflects poorly on the “champion for free speech and free press”, John McCain, channelling Brezhnev, explains why it doesn’t.

* Bershidsky: Russia’s RT Just Isn’t Worth Attacking. Simpler Explanations Are Usually Correct. Even on Russia.

It looks like Russia’s retaliation will be very mild; so far, we only know that RFERL/Voice of America and their various projects will have to register as foreign agents.

* Alexey Kovalev: Here’s what Russians think: Brexit is your creature – don’t blame it on us

* Kevin Rothrock translates Oleg Kashin’s op-ed for the liberal Republic webzine (formerly Slon): When Russians stopped believing in the Western media:

There’s a thoroughly naive misperception that the people working for propaganda outlets are all hard-nose cynics ready to say that black is white just so they can make their mortgage payments. In fact, anyone who’s talked with just one of these people knows that any cynicism that might guide them is something entirely different: it’s not “I lie because of my mortgage,” but “I say what serves the state’s interests because that’s how it works everywhere — we serve Russia, CNN serves the U.S., and the BBC is itself a state organization.”

Hearing this kind of talk, Russians from the independent media of course always laughed, but time has shown that the ones who said “it’s like this everywhere” were right. At the very least, over the past year and a half, the Western press with its highest standards has gifted us too many outrageous stories to ignore.

Kashin is a Russian liberal, yet even so, he is of the firm opinion that the Western media has gone way overboard in their Russiagate hysteria. In this sense, he parallels Bloomberg’s Leonid Bershidsky and Alexey Kovalev, who sometimes writes for The Guardian – both of them are highly anti-Putin pro-Westerners, yet not completely devoid of critical observation, for which they in turn have been accused of being Kremlin trolls by the ROG truthers.

* Joe Lauria: The Creation of RussiaGate

* Russian freedom fighting anarchist Pyotr Pavlensky flees to the West (after a rape accusation cooked up by the KGB… maybe not). Burns down a French book. Neoliberals who praised him when he was pulling his stunts in Russia now practice punitive psychiatry on him.

* Bryan MacDonald: How George Soros’ people enlisted me as a ‘foot-soldier in the fight against Putin’. There are a lot of these scam NGO’s sucking up State Department and Soros money.

* Muh based Putlerreich introducing gender equality law inc. quotas for female % in politics; will solve “problems of sexism, ageism, harassment.”

* Russia Elections 2018:

Will Putin run? Bryan MacDonald thinks there is still a slight chance that he won’t. Will have a separate post on this.

Ksenia Sobchak got a Vkontakte account just this week. Goes to show why she won’t rise above the single digits: All the Russian liberal kreakl tusovka hangs out on Facebook.

World

* James Thompson: Boost your IQ. Important discussion of two recent papers on effect of more school education on later IQ.

* Gregory Hood: The Lie of Law

* Defrosted: Just noticed that Peter Frost is writing again, though at his own website now.

* New study: Moderate alcohol consumption improves foreign language skills (the paper). Funny and so very true.

india-map-gdp-per-capita

* GDP per capita map of the Indian subcontinent. Pakistan used to be richer than India, really strikes home the fact that this is no longer the case.

* The Atlantic has a very long profile of Andrew Anglin. Skimmed through it. Seems like a stereotypical background for a Neo-Nazi.

* Inventor of Ethereum is much less cool than Pavel Durov.

* Bunch of Alt Right/Alt Right people lost their Blue Checkmarks on Twitter (Richard Spencer, Jason Kessler, Laura Loomer, James Allsup would be recognizable to many); Baked Alaska got suspended entirely.

This is in line with a new Twitter policy to remove verification from users who “promote hate” (except, presumably, against white people).

However, the real fun will begin on Nov 22, when new rules on the display of “hateful imagery and hate symbols” – developed in conjunction with the ADL – will come into effect. Like schools and workplaces, it will now also take into account offline behavior, as well as “monitor for hate speech in usernames, display names, and profile bios.”

Since everyone born in 1988 is, by definition, a Nazi, there’s some chance @akarlin88 will be shut down around that time. Can’t say I’ll miss it.

* Wrath of Gnon digs up a note on medieval German hospitality.

german-hospitality

I have sometimes wondered about practical logistics of long-term travel in the deep past (esp. if you lose your purse). This helps explain things, I suppose.

 
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moscow-2049

Eurasian Federation, 2049.

Half a year ago I wrote about the absurd legal case against Dmitry Bobrov, a Russian nationalist who was sentenced for using extremist terminology such as “the great Russian people.”

No, I am not even exaggerating, here is the formal conclusion of the court’s “linguistics expert,” Galina Melnik (who is also a professor at Saint Petersburg State University and a published author in American scientific journals):

Linguistic terms are used that constitute evidence of propaganda of the exclusivity of the white race and ethnic Russians. For instance, there are epithets that positively characterize ethnic Russians – “The great Russian people,” “Russians are the most prospective white people,” “planetary significance,” as well as phrases, that negatively characterize other races – “Non-white peoples,” “races of a second order”; various exaggerations; writing words with capital letters so as to give a specific meaning to concepts – White people, Russians, Russian Popular Socialists, Russian Socialism [AK: The names of ethnicities are uncapitalized according to standard Russian grammar]; phrases such as that some peoples “have a phase of obscuration, degradation, and disorientation,” while others are experiencing a “steady growth in the national consciousness.”

I assure you that this sounds as deranged in Russian as it does in English. Apparently, the phrase “great Russian people” is propaganda of exclusivity, the phrase “white people” demeans non-whites, and violating the standard grammatical rules of capitalization in the Russian languages constitutes the most outrageous sort of extremism. American SJWs are nervously smoking in the corner.

The only possibly questionable phrase in the quoted paragraph is “races of a second order.” However, in the article that got Dmitry Bobrov into trouble, “Racial Doctrine of the National Social Initiative” (which is blocked in Russia), it is explicitly stated that the phrase refers to subraces, as opposed to implying a racial hierarchy.

The combination of evolutionary and historical processes led to the fact that now a large White race consists of several subraces, or races of the second order.

Evidently, Galina Melnik did not feel the need to give this vital piece of context in her summary.

This Orwellianism echoes the arguments of another contributing “linguistics expert,” Rezeda Salahutdinova (who has a degree in the joke subject of “Scientific Communism” from Kazan University):

In particular, she declared that the phrase “white race” just by itself fans the flames of hatred, because “they don’t talk like that in modern science” and that the expression “non-white people” is extremist, since it attacks the national dignity of other peoples.

It is heard to describe this theater of the absurd under the guise of a law court. When she was asked, “What specific racial, national, ethnic, social, or other groups were insulted?”, she replied: “All those groups, that are not identified with whites.”

Even though Dmitry Bobrov, representing himself, absolutely destroyed the arguments of the prosecutors’ pocket linguistic experts – court transcripts show even the judge becoming annoyed with their incompetence – he still ended up getting sentenced to 2 years in a penal colony.

In the event, Bobrov went missing on the day the verdict was set to be announced and is now considered to be on the run. Hopefully he is safe in a foreign country.

And to top it all off, citizens of Country 282 have to listen to lectures from Hillary Clinton about how Putler heads the global white supremacist movement and read Washington Post op-eds by affirmative action Kremlinologists on how Russia “disparages black people” and “centers the Russian slav.”

Anyhow.

This Kafkaevschina finally motivated me to run a guide on avoiding Russia’s hate speech laws at my Russian language blog: Руководство по Избежанию 282

Here is a summary in English.

1. Strictly avoid any Nazi symbology.

That includes “ironic Nazism” of the sort that the Alt Right likes to play around with.

But all rules have exceptions.

If you are sufficiently close to the Kremlin you may well write articles along the lines of “Hitler did nothing wrong” (at least up until 1939). You can also organize conferences for foreign Neo-Nazis freaks, such as the International Russian Conservative Forum in 2015; some Galactic Brain in the Kremlin even came up with the idea of inviting German Neo-Nazi Udo Voigt, with his entirely non-ironic demands to return Kaliningrad to Germany.

2. Don’t insult Caucasians.

All countries have differential racial hierarchies for the permissibility of insulting different racial and ethnic groups.

handshakeworthy-russophobia

Handshakeworthy anti-Russian racism from /r/politics.

For instance, ex-Director of National Intelligence James Clapper thought nothing of saying that Russians are “almost genetically driven to co-opt, penetrate, gain favor, whatever, which is a typical Russian technique” in a meeting with NBC journalists – one wonders how long somebody who said anything remotely similar about Jews would last in his job (actually we don’t have to wonder at all). Clearly, Jews, Blacks, the gay race, and the fat race are at the top, while white rednecks and Russians are at the bottom.

In Russia, there is a similar Great Chain of Racial Privilege.

One Russian nationalist, Konstantin Krylov, got convicted under Article 282 for his considered and entirely mild-mannered position on the issue of federal transfers to the Caucasus: “It it time to do away with this strange economic system.” In contrast, Holocaust denial only became illegal in 2014, and authors such as Israel Shamir with a reputation for anti-Semitism haven’t encountered significant problems (unlike his French language publisher, who was faced with a ban of the book he had translated and the prospect of three months in jail). On the other hand, you can’t relax too much: The Stalinist singer Alexander Kharchikov had one of his songs, consisting entirely of folk sayings about Jews, banned for extremism in 2012.

In fairness, Russia does also jail the most cartoonishly extreme Russophobes, such as Boris Stomakhin, who called for terrorist actions against Russian civilians to fight against “Chechen genocide.” In the West and amongst Russian liberals, Stomakhin is considered a prisoner of consciousness, because in their world, supporting terrorism against Russians is far more handshakeworthy than waxing lyrical about “the great Russian people.”

3. Don’t be an oppositionist.

This is so obvious that it hardly needs an explication – but that doesn’t make it into a rock-solid defense either.

For instance, just a few weeks ago, the police searched the offices of the Institute of Russian Civilization, a bookshop that focuses on republishing historical works – not Mein Kampf or Last Will of the Russian Fascist, but entirely mainstream texts in the Russian conservative and theological tradition, many of whom Putin has himself cited in his speeches (e.g. Berdyaev, Danilevsky, Ilyin, Karamzin, Pobedonostsev, Soloviev, Trubetzkoy, Khomyakov).

Apart from blocking the oppositionist Sputnik i Pogrom, Russian censorship authority also blocks the website of the Russian Imperial Movement, even though it is Orthodox-monarchic and entirely non-racialist in character, and even went to the trouble of advancing Russia’s geopolitical goals by sending a batallion to the Donbass in 2014.

4. You can’t be pro-Ukrainian.

You can if you’re a liberal – in that case, that’s actually expected of you – but you can’t if you’re a nationalist, especially with respect to the Crimea, for which there is a “separatism” clause on the lawbooks.

5. Don’t appear on law enforcement’s radar.

Possibly what really did Bobrov in is that he has a previous (and justified) conviction from back in the 2000s, when he headed the Schulz-88 Neo-Nazi gang that beat up immigrants. The current conviction is unjust, not only because this time round he literally did nothing wrong, but because the state is essentially sending violent Neo-Nazis a message: Regardless of whether your active is legal or illegal, violence or non-violent, we are still going to lock you up the same.

But let’s assume you’re not already “marked” by dint of previous legal troubles.

Here’s something you should bear in mind: The various Russian silovik agencies are not staffed by especially bright or conscientious people – in the case of Roskomnadzor or “Center E” (police anti-extremism division), their priorities are to fulfill their monthly quotas for finding “extremists” and get their bonuses for doing so. As such, they spend much of their time in the rich and easily accessible hunting grounds of VKontakte, which remains Russia’s most popular social network. As such, it would do well for “politicals” to limit their VKontakte posting to cat memes, while maintaining the bulk of their “meaningful” presence on Facebook and Twitter.

very-extremist-material

NSFR (Not Safe For Russia): What got Andrey Voronin in trouble just a few days ago.

Incidentally, this applies likewise for Westerners. Since nationalism is an almost purely “export” product so far as the Putlerreich is concerned, The Daily Stormer has been able to maintain an uninterrupted presence on VKontakte – even as Russians on the platform get in legal trouble for reposting historical illustrations that happen to feature a swastika.

6. Pay your mite to ZOG.

Liberals have an admirable tendency to stick up for each other, thanks to their higher IQs and levels of trust.

Nationalists are the opposite.

Whereas a liberal in Bobrov’s position would have gotten no end of attention from (predominantly liberal) human rights organizations, hardly any nationalist website anybody apart from Sputnik i Pogrom even bothered to highlight his case.

This problem is a very hard one and frankly the dearth of human capital is the single most crippling problem for conservatives and nationalists well nigh everywhere.

It is ironic that if anybody is going to seriously represent and advocate for you if you get in trouble, it will likely be a liberal with an idealistic commitment to free speech.

Therefore, the least that you can do is to pay at least symbolic fealty to ZOG – for instance, by affirming your commitment to free speech and human rights – so that when you do get sent off to the Gulag, the liberal sphere – which has at least ten times as much media influence as the nationalists – can’t just dismiss you by saying that this sort of world is what you were fighting for anyway.

7. Don’t listen to all this advice.

Doing so will just make you a mindless Kremlin propagandist. They’re a dime dozen anyway, and you probably won’t get rich even if you stand out, since all the most lucrative positions have long been carved up anyway.

Besides, as the host of our ROGPR podcast Kirill Nesterov acerbically noted, at the rate the wheels are coming off the Kremlin’s prosecution machine, it won’t be long before people start going to jail for justifying the return of the Crimea – and we’re not even entirely sure that this will happen after Putin loses power.

 
• Category: Race/Ethnicity • Tags: Freedom of Speech, Hate Speech, Law, Russia 
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The American Interest’s Karina Orlova writes:

A group of young independent filmmakers (Sota Vision) captured a moment that perfectly sums up not just what it was like yesterday in Moscow, but also what it’s like living in Russia these days. This is the reward you get for going out of your way to praise a dictator.

(Original).

His protestations of his “innocence” in the police van went unheeded.

Predictably, this video evokes a gushing flood of Schadenfreude amongst anti-Putinists, while pro-Putinists experience a jittery “there but for the grace of God go I” feeling.

But from a neutral perspective, how exactly does this reflect badly on “teh regime.”

What we see in it is unsanctioned protesters getting treated the same under the law, regardless of their fealty or lack thereof to the national leader.

This is the marker of civilization.

Let’s compare and contrast to Ukraine, the country where Navalnyites won – and what the Western elites want for Russia.

There, anti-war protesters are not only arrested, but jailed, whereas on the rare occasions that much more aggressive Maidanist “activists” are arrested they are let off with apologies soon after.

In fact, in Ukraine, so long as you belong to the appropriate faction, you can even shoot taxi drivers with pneumatic pistols for refusing to chant “Glory to Ukraine” along with you and get off with just house arrest.

This is the marker of barbarism.

 
• Category: Miscellaneous • Tags: Color Revolution, Law, Russia 
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To be sure, supporting sharia law doesn’t necessarily make you a radical Islamist who hates modern civilization.

It is, after all, a cultural as well as a legal tradition. There are four distinct schools of sharia jurisprudence, with a long history of internal debate between them. Although some schools are hardline, some are surprisingly liberal. Nor has it even always been particularly illiberal, in relative terms. While giving women have the inheritance might not be all that great, it was an improvement over most other 7th century legal systems, which gave them none.

I do somewhat sympathize with those Muslims who instead of taking the easy road of aping the West are instead trying to modernize their own traditions.

Problem: It’s almost certainly a lost cause because there are so very few of the above. correlation-sharia-death-for-apostasy While there might be the occasional Muslim (or quasi-Muslim postmodernist) attempting to derive the legality of gay marriage from the hadiths, in practice there is a remarkably close association support for sharia law, and support for other highly regressive practices that are incompatible with high civilization.

For instance, the correlation between support for sharia law and the death penalty for apostasy is r=0.79 (as per PEW data). You are not going to get very far in an intellectual conversation about the finer points of the Hanafi school’s position on the question of whether brain emulations have a soul with a typical sharia law supporter in a society where support for sharia law is high.

Like it or not, when the statistically average Muslim expresses support for sharia law, he is affirming his Islamic identity and its various correlates, such as death for apostasy and stoning for adultery – and not so much things like equal dialogue of civilizations and solidarity in the international anti-imperialist struggle.

Just as Arthur Jensen argued that IQ can be considered as a central node amongst many other economic and socio-economic variables, the so-called “g nexus,” I suspect that one could also describe a sort of “sharia nexus” to quantify the relative backwardness of Muslim societies on different inter-correlated issues.

A couple of years ago, there was a chart floating about on the /pol/sphere that collated a bunch of PEW polls that queried Muslims on different questions that might be of interest to responsible immigration and anti-terrorist authorities. The sharia nexus is evident even to the naked eye, and is clearly stronger even than just IQ. sharia-nexus

 
• Category: Ideology • Tags: Islamism, Law 
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I have no idea what possessed Putin.

Did he think that it would spare him Western criticism in the run-up to Sochi? Of course not. Khodorkovsky was on the back-burner. LGBT rights are West’s stick du jour to beat up on Russia.

Did he think it would improve the legal and investment climate? I sure hope not, because it would mean he is an idiot who laps up the propaganda of those who loathe him.

Did he think it would reflect well on him? Journalists are rushing in to confirm that Putin’s pardon is just as arbitrary as the original indictment. (They have a point – about the former). Even pundits who once excoriated Khodorkovsky as the criminal he was, such as Mark Adomanis, now talk of the “trumped-up charges of fraud and tax-evasion” that put him in prison.

Did he think Khodorkovsky would shut up in gratitude? There was no admission of guilt involve, and the Menatep bandit has begun agitating from his 5-star Berlin hotel already.

Russia desperately needs more Westernization. In any truly civilized country, YUKOS’ campaign of tax evasion and contract killings would have ensured Khodorkovsky would have been locked up and the keys thrown away forever.

Instead, he will busy himself with plotting intrigues, as oligarchs are wont to do in banana republics. The only difference is that Russia doesn’t have bananas.

12/22/2013 EDIT: Alexander Mercouris has penned what I consider to be the defining article on this: Khodorkovsky – The End of the Affair? Go, read.

(Republished from Da Russophile by permission of author or representative)
 
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Here is the discussion at this on The Russia Debate.

My friend and DR commentator Alexander Mercouris correctly predicted this outcome – that Serdyukov would be charged, but that it is a complex case that will take a long time and likely avoid more the more serious allegations in favor of those that can be more easily proved in a court of law. So I’ll just quote his analysis:

As people who followed my opinions about this case will know, I have always thought it more likely than not that Serdyukov would eventually face a charge but I have also thought it more likely than not that it would not be a charge that reflected the seriousness of what he had done. I have also always thought and I still think (as does Anatoly Karlin) that this case is very likely to end in a plea bargain.

The reason I have always thought these things is not because I have any real doubt about Serdyukov’s corruption and of his personal involvement in the corrupt schemes that have wracked the Defence Ministry under his watch (see my very first comment on this thread) or because I thought he was being protected by someone (see my second comment) but because personal experience tells me how difficult it is in these cases of high level corruption and embezzlement to secure a conviction. Again I would repeat what I have said previously, which is that the mere fact that Serdyukov’s brother is rich or that Vasilieva has a stash in her multiroom apartment, is not in itself evidence against Serdyukov that can be used in a Court of law. There has to be witness evidence and/or a paper trail directly linking Serdyukov to some or all of these corrupt activities, which the prosecution is in a position to say cannot be interpreted in any way other than as evidence of his guilt. Given that Serdyukov was presumably taking steps to conceal what he was up to, that sort of evidence almost by definition is going to be difficult to find.

It has not helped matters in this case that judging from media reports Serdyukov is being investigated by two rival teams of investigators – one from the Investigative Committee and one from the military Procurator’s Office – who appear much of the time to be in bitter rivalry and disagreement with each other. Conflicts of this sort invariably complicate investigations and can even wreck them completely.

What I would say about this case at the moment is this:

1. It is by no means impossible that what Jose Moreira is saying is true and that this is only the first charge and that more serious charges may follow. I would like to believe that but I have to say based again on personal experience that I would not be personally surprised if the present charge is as good as it gets because it is the best that the prosecution can realistically prove for the reasons I have previously given;

2. If more serious charges are brought against Serdyukov, I again repeat that it is more likely than not that the case will still end in a plea bargain, which makes it unlikely that Serdyukov will receive the sort of punishment people (including me) want him to receive and which he arguably deserves. However I want to say again that the likely reason for this is not because Serdyukov is being protected by someone but because a plea bargain is a cost effective way of securing a conviction in a complex case where because of the difficulties presented by the evidence a conviction cannot otherwise be guaranteed.

3. Even if the best that can be achieved is a conviction for criminal negligence, that is a great deal better than nothing and it is certainly not a joke. Though it only comes with a potential 3 month prison sentence, it is a criminal conviction nonetheless. In addition, though I don’t know this for a fact, there must at least be a strong possibility that if Serdyukov is convicted under this charge a civil claim from the Defence Ministry for compensation for the economic loss he has caused will follow. This would only cover the loss caused by the actual negligence Serdyukov had been convicted for, not the loss caused by the whole Oboronservis scandal and its many permutations. However it would still be a substantial amount of money and probably more than Serdyukov could easily pay.

In summary, I know most people take a much more negative view of the Russian legal system than I do. However my frank opinion is that if this case were happening anywhere in western Europe (including Britain) its conduct and eventual outcome would be little different from what is proving to be the case in Russia whilst based on what I have read in the media about defence procurement practices and management in the US it is perhaps unlikely such a case would be brought there at all.

Another poll shows declining Russian “everyday” corruption:

In the past, I showed that according to polling evidence, the actual level of Russian “everyday” corruption from Putin’s coming to power to 2012 had, in fact, remained roughly steady (many Western commentators argue it has increased).

There is, however, a steady stream of evidence that 2013 is beginning to see a real and marked improvement in these indicators.

(1) First, there was Transparency International’s Global Corruption Barometer survey which I covered here. Unfortunately, they found the Russia data to be “an outlier when compared with other available data,” and stridently refused to release any figures. But circumstantial evidence points to the outlier being in a positive direction.

In particular, a FOM poll showed that:

Firstly, according to the survey, 79% of Russians are not faced with bribery at all. (This number has grown from 60% in 2008). Only 15% paid bribes. (In 2008 it was 29%).

(PS. That said, I have been unable to find the provenance of the 15% figure, at FOM’s website; though I don’t think the Odnako author would just make it up either. Fedia, could you help please?)

(2) I have since come across VCIOM polling data for corruption, which I had missed in my prior survey of corruption polls. It is translated below:

In the past year, did you need to give money or gifts to people whom you needed to resolve your problems?
2006 г. 2007 г. 2008 г. 2013 г.
Yes, frequently 19 9 20 7
Yes, but these were singular cases 34 25 28 12
No 45 60 47 80
N/A 2 5 6 1

For comparability with the other polls, this shows that the percentage of people saying they’d paid a bribe in the past year going as follows: 2006 – 53%; 2007 – 34%; 2008 – 48%; 2013 – 19%. This suggests a far higher “baseline” level of corruption that that suggested by the other polling organizations (i.e. Levada, FOM, and Transparency), which have answers to this question typically ranging at 15%-30%, but it likewise indicates a very marked improvement now relative to the 2000′s.

One particularly noticeable thing is the change in the structure of corruption. While 14%-16% (of those who had to give bribes in the past year) had their corrupt run-in with the police during 2006-2008, in 2013 it was just 6%. This suggests that the much ballyhooed police reforms had actually worked quite well. (That said, there was no similar improvement with the traffic police). Not quite, see Little Pig’s comment.

(Republished from Da Russophile by permission of author or representative)
 
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Here is the list of US citizens publicly barred from Russia in response to the US Magnitsky List. Are you familiar with any of them?

Individuals alleged to be involved in the use and legalization of torture and indefinite confinement of prisoners – the “Guantanamo list”:

1. David Spears Addington – Chief of Staff of the U.S. Vice-President Dick Cheney (2005-2009);
2. John Choon Yoo – Legal adviser at the U.S. Department of Justice (2001-2003);
3. Geoffrey D. Miller – Commander of Joint Task Force Guantanamo, which administers the U.S. military detention centers at the U.S. Guantanamo Naval Base on Cuba (2002-2003)
4. Jeffrey Harbeson – Commander of Joint Task Force Guantanamo (2010-2012)

Individuals alleged to be involved in abuse of Russian citizens’ human rights abroad:

5. Jed Saul Rakoff – U.S. District Judge for Southern District of New York;
6. Preetinder S. Bharara – U.S. Attorney for the Southern District of New York;
7. Michael J. Garcia – Former U.S. Attorney for the Southern District of New York;
8. Brendan R. McGuire – Assistant U.S. Attorney for the Southern District of New York;
9. Anjan S. Sahni – Assistant U.S. Attorney for the Southern District of New York;
10. Christian R. Everdell – Assistant U.S. Attorney for the Southern District of New York;
11. Jenna Minicucci Dabbs – Assistant U.S. Attorney for the Southern District of New York;
12. Christopher L. Lavigne – Assistant U.S. Attorney for the Southern District of New York;
13. Michael Max Rosensaft – Assistant U.S. Attorney for the Southern District of New York;
14. Louis J. Milione – Senior Special Agent of the U.S. Drug Enforcement Administration;
15. Sam Gaye – Senior special Agent of the U.S. Drug Enforcement Administration;
16. Robert F. Zachariasiewicz – Special Agent of the U.S. Drug Enforcement Administration;
17. Derek S. Odney – Special Agent of the U.S. Drug Enforcement Administration;
18. Gregory A. Coleman – Special Agent of the Federal Bureau of Investigation;

I’m familiar with two of them.

John Yoo, of course – the guy who provided much of the “legal” basis for both Guantanamo and the Iraq War. I don’t view him as a war criminal or anything like some of the liberal leftists do. Nonetheless, if Russia is providing a “symmetrical” response to the Magnitsky List, it couldn’t bar a more appropriate person. Yoo himself seems to be taking it in good stride.

The other guy I’m familiar with (too familiar with) is Preet Bharara who was just now the subject of a gushing hagiography from Mark Galeotti. In reality he is a thug who thinks who thinks that going after online poker players’ money is a good use of US investigative resources. Oh, I know full well that he was really blacklisted for his actions against Viktor Bout – a legitimate arms trader who the US only took a disliking to after he started selling weapons to the wrong people. But while I may not care much about Bout, I do care about my money, especially that which was frozen after Black Friday, and the hit to my expected earnings once the biggest online poker vendors pulled out of the US in its aftermath. (How else do you think I blog and write books without a regular day job?). So for this reason I am extremely happy to see Bharara on that list in the knowledge that maybe, just maybe it will cause him some spot of inconvenience one day.

(Republished from Da Russophile by permission of author or representative)
 
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No matter how you look at it, he is a traitor. He violated the UCMJ. Although he is free to make ethical arguments as to why he leaked Collateral Murder and the US Embassy cables, the US is fully within its rights to prosecute him.

I’m quite consistent about this: Treason is a punishable offense, no matter where and why it happens. I do not have an issue with the US executing the Rosenbergs or the USSR executing Western spies during the Cold War either. It’s part of the risk you take when you choose to sell out your country for a few shekels. This likewise applies when you do it not for money but for “idealistic” reasons.

I agree that in a perfect world, the fact of Manning (1) releasing it out of ethical, not monetary convictions and (2) giving the entire world access to it, as opposed to foreign hostile intelligence services – unlike, for instance, the Russian KGB traitor, Vasily Mitrokhin – should be a mitigating factor. However, as a sovereign nation, the US has no obligation to take that or international left/liberal opinion into account.

The Assange case is completely different. Here the US is trying to extend its jurisdiction to the entire world, so that an Australian citizen can now be found guilty of “espionage” against the US even if he’d never stepped foot inside it. This is called imperialism, and we are opposed to it. What’s more, the methods used to do it are particularly nauseating and underhanded. The probable plan is to extradite Assange to Sweden, from whence he can be quietly renditioned to the US. All based on incredible and patently false rape accusations, questioning which is going to get you blacklisted and smeared by legions of Guardianistas, PC brigades, concern trolls, and sundry useful idiots of imperialism. It would be infinitely more respectable for the US to just whack him.

That is why I support Assange to the hilt, but don’t care for Manning. It’s a very logical and consistent position, I think, but many don’t see it that way. They view it as anti-American, misogynist, and reactionary. I think it is pro-American, anti-imperialist, and pro-rule of law.

(Republished from AKarlin.com by permission of author or representative)
 
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According to the press release (PDF) regarding the recent judgment, the issues considered by the ECHR as regarding complaints about the 2003 Russian Duma elections were the (1) the opposition’s access to an “effective remedy” to complain about media bias in favor of United Russia; and (2) that the media’s aforementioned bias prejudged the fairness of the elections. The ECHR ruled both claims to be invalid as shown in the extended quotes below:

“However, the applicants had had the possibility of requesting invalidation of the results after the elections, which they had used. The Supreme Court had had the powers to annul election results; it had examined the applicants’ claims and delivered a reasoned judgment. The independence of the Supreme Court had not been questioned, and the Court did not consider that its impartiality was an issue. … It therefore concluded that the proceedings before the Supreme Court had to be considered an effective remedy in accordance with the Convention.”

“The Court first addressed the applicants’ claim that the TV companies had been manipulated by the government. … Thus, the applicants had not presented any direct proof that there had been abuse by the Government of their dominant position in the TV companies concerned. The TV journalists themselves had not complained of undue pressure by the Government or their superiors during the elections. Indeed, formally speaking, the journalists covering elections had been independent and, under Article 10 of the Convention, had had wide discretion to comment on political events.”

“Furthermore, it concluded that Russia had complied with its obligation to act in order to ensure that elections were free both in procedural as well as in substantive terms. … Also, opposition parties had been able to convey their message on TV by using the free and paid airtime provided without distinction to them and to the other political forces. The OSCE reports had confirmed that while the main country-wide State broadcasters had displayed favouritism towards United Russia, voters who sought information had been able to obtain it from other available sources. Finally, the Court recalled that imposing prior restraints on free speech of the journalists had to be avoided, especially in the sphere of political debate. The Court stressed that the Russian legislation proclaimed the vprinciples of neutrality and editorial independence of public media and prohibited journalists from taking part in political campaigning, and the applicants did not produce sufficient evidence that those principles were not complied with in practice.”

“The Court concluded that Russia had taken measures which guaranteed some visibility of opposition parties on Russian TV and ensured editorial independence and neutrality of the media. While equality among all political forces during those elections might not have been achieved, the State, in the light of its broad discretion to decide (wide margin
of appreciation) on such matters, had not failed to meet its obligation to ensure free elections.”

No surprise the liberals and commies were none too happy with failing to get the ECHR to delegitimize the 2003 elections.

The lawyer Vadim Prokhorov, who prepared the opposition’s joint complain to the ECHR: “These court judgments drive the situation towards street democracy… One thing is perfectly clear now – the European Court treats the situation regarding the ‘independent’ nature of the Russian media by analogy with the European media, whereas electronic media here depend entirely on the ruling party, which is what the ECHR failed to take into consideration.”

Vadim Solovyev, KPRF lawyer: “Politics has finally reached the European Court… Europe is faced with grave economic problems, and I suppose they hope to get our gas and oil. On the other hand, I assume that it is hard for a court to create a precedent that might affect other countries of the so-called new democracy, where election campaigns are at least as complicated as in Russia, specifically the former Soviet Union nations, such as Ukraine and Georgia.”

Vladimir Ryzhkov, independent opposition: “Although I normally tend to deny a political aspect of ECHR judgments, this one is obviously political. The case is almost a decade old and the judges must have reached an impasse – to invalidate the results of the vote, but what to do with the parliaments? It was Russia’s fifth Duma, but we have a new one working now. I have not seen the text yet but I expect the document includes recommendations for our legislators not to repeat the situation regarding unequal access to TV coverage.”

H/t @CraigJamesWilly for drawing this to my attention.

(Republished from Da Russophile by permission of author or representative)
 
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It’s one thing if Western journalists and Yukos PR henchmen – if there is indeed any difference – shill for all they’re worth about the travails of Khodorkovsky, the former oligarch doing time for fleecing the Russian Treasury to the tune of billions of dollars, charges he sooner boasts about than denies when given the opportunity to address Russians on national TV. It’s quite another when many ordinary Russians begin to lap up their lies, with a disturbing 10% describing him as a political prisoner in a recent VCIOM poll, and opinions are split 50/50 on a Presidential pardon. Congrats to the PR team, I guess.

Fortunately, at least some court systems still keep their judgments partitioned from the demands of self-interested businesspeople, their PR hacks, libertarians who believe that money should be able to buy a Not Guilty verdict, liberals operating under the delusion MBK is a popular and legitimate political opponent of Putin, etc. According to four (by my count) judgments to date, the European Court of Human Rights (ECHR) is one such institution. The Yukos team managed to get their cases heard at Europe’s highest court of appeal, and they decided that – barring a few administrative irregularities, for which Khodorkovsky was awarded a paltry $35,000 – there was no proof for any of his allegations that the case was politically motivated. This is despite the fact that the ECHR can in no sense be having a Russian government-friendly stance, given the numbers of judgments that have gone against it there.

To wit, despite the swarms of high-profile lawyers batting for Khodorkovsky, they could (1) neither prove that Khodorkovsky didn’t engage in tax evasion – to the contrary, the ECHR sided with Russia’s arguments; (2) not could they evidence their claims that it was a case of selective prosecution, i.e. that MBK’s schemes were prevalent at the time; indeed, the ECHR judges even went so far as to point out that rich businesspeople like MBK have the position and incentive to claim that prosecutions are politically motivated, whereas courts of law need concrete evidence as opposed to the opinions and aspersions that journalists and politicians are free to indulge in.

Nonetheless, op-eds of the WSJ, FT, etc. continue to gloss over the ECHR judgments where they do not ignore them altogether, and paint Khodorkovsky as some kind of principled human rights champion standing up to the dark Chekists who surround Putin (this despite that his right-hand security man Pichugin was convicted to life for contract murders). Masha Gessen, a particularly mendacious piece of work even by the sordid standards of Western journalism on Russia, claimed that the ECHR judgments could even be “read as mandating [Khodorkovsky's] release” in a 5 page hagiography for Vanity Fair.

Since these people seem to feel safe in assuming that no-one will ever read the ECHR judgments (depressingly, it seems to be a valid assumption), I am doing what I can to expose their lies by reprinting the most relevant parts here. Bits of particular interest are bolded.

CASE OF KHODORKOVSKIY v. RUSSIA, 28/11/2011 [AK: As regards whether MBK's prosecution is politically motivated]

VIII. ALLEGED VIOLATION OF ARTICLE 18 OF THE CONVENTION

249. The applicant complained under Article 18 that the State had used the criminal prosecution for a political end and in order to appropriate the company’s assets. Article 18 of the Convention provides:
“The restrictions permitted under [the] Convention to the said rights and freedoms shall not be applied for any purpose other than those for which they have been prescribed.”

A. The parties’ observations

250. The Government submitted that the applicant’s allegations that his criminal prosecution had been politically motivated were not supported by the materials of the case. The Government referred to the judgment delivered in the applicant’s case as proof that the charges against him were serious and genuine. They also described the events which had preceded the start of the investigation into the activities of the Yukos management, especially with regard to the Apatit case.

251. The applicant maintained his allegation that his criminal prosecution had been politically motivated. The applicant submitted that the above materials were powerful evidence of ulterior purposes contrary to Article 18. He had at the very least adduced “prima facie evidence pointing towards the violation of that provision” (Oates v. Poland (dec.), no. 35036/97, 11 May 2000), which the Government had entirely failed to address. The fact that he had been convicted in no way precluded improper motives in bringing the charges. Further, as a matter of Convention law, it was immaterial whether there was evidence justifying the bringing of the prosecution, if, as a matter of fact, it was brought for “other purposes” (see Gusinskiy v Russia, no. 70726/01, 19 May 2004). Indeed, the fact that he had received a long sentence supported the inference of political motivation. The travaux préparatoires for Article 18 indicated that the drafters of this provision were concerned to ensure that an individual was thereby protected from the imposition of restrictions arising from a desire of the State to protect itself according “to the political tendency which it represents” and the desire of the State to act “against an opposition which it considers dangerous”. The applicant maintained his argument that his arrest and consequent detention on 25 October, just a few weeks before the Duma elections on 7 December 2003 and shortly before the completion of the Sibneft/Yukos merger, had been orchestrated by the State to take action against an opposition which it considered “dangerous”, contrary to Article 18.

252. The applicant asserted that those activities had been perceived by the leadership of the country as a breach of loyalty and a threat to national economic security. As a counter-measure the authorities had undertaken a massive attack on the applicant and his company, colleagues and friends.

253. In support of his allegations the applicant submitted reports from international and Russian media, various governmental and non-governmental organisations, the PACE report “On the circumstances surrounding the arrest and prosecution of leading Yukos executives” (published on 29 November 2004 by Mrs Leutheusser-Schnarrenberger, the Special Rapporteur for the Parliamentary Assembly of the Council of Europe), the US Senate resolutions on this subject, European Parliament reports, documents of the UK House of Commons, decisions by the UK courts in cases of extradition of several former Yukos managers to Russia, and decisions by the Cypriot, Dutch, and Swiss courts to the effect that the prosecution of the applicant was politically motivated. In particular, the applicant referred to the words of the Swiss Federal Tribunal, which in August 2007 found that the facts, if analysed together, “clearly corroborate the suspicion that criminal proceedings have indeed been used as an instrument by the power in place, with the goal of bringing to heel the class of rich ‘oligarchs’ and sidelining potential or declared political adversaries”. The applicant also quoted public statements by several high-ranking Russian officials who had acknowledged that “the Yukos case” had political overtones (Mr Gref, Mr Illarionov, Mr Shuvalov, Mr Mironov, Mr Kasyanov and some others). The applicant produced witness statements by several former Yukos managers. He further referred to his submissions within the case Khodorkovskiy v. Russia (no. 2), no. 11082/06, which contain a more detailed analysis of his political activities and business projects.

B. The Court’s assessment

254. The Court reiterates that it has already found that, at least in one respect, the authorities were driven by improper reasons. Thus, the Court found that the applicant had been arrested in Novosibirsk not as a witness but rather as a suspect. However, the applicant’s claim under Article 18 is different from his grievances under Article 5. The applicant maintained that the entire criminal prosecution of Yukos managers, including himself, had been politically and economically motivated. The Court reiterates in this respect that “Article 18 of the Convention does not have an autonomous role. It can only be applied in conjunction with other Articles of the Convention” (Gusinskiy v. Russia, no. 70276/01, § 75, ECHR 2004-IV). In the light of the above the Court will consider the applicant’s allegations under Article 18 of the Convention in conjunction with his complaints under Article 5 of the Convention, cited above.

255. The Court reiterates that the whole structure of the Convention rests on the general assumption that public authorities in the member States act in good faith. Indeed, any public policy or an individual measure may have a “hidden agenda”, and the presumption of good faith is rebuttable. However, an applicant alleging that his rights and freedoms were limited for an improper reason must convincingly show that the real aim of the authorities was not the same as that proclaimed (or as can be reasonably inferred from the context). A mere suspicion that the authorities used their powers for some other purpose than those defined in the Convention is not sufficient to prove that Article 18 was breached.

256. When an allegation under Article 18 is made the Court applies a very exacting standard of proof; as a consequence, there are only few cases where the breach of that Convention provision has been found. Thus, in Gusinskiy v. Russia (no. 70276/01, § 73–78, ECHR 2004-… (extracts), the Court accepted that the applicant’s liberty was restricted, inter alia, for a purpose other than those mentioned in Article 5. The Court in that case based its findings on an agreement signed between the detainee and a federal minister of the press. It was clear from that agreement that the applicant’s detention was applied in order to make him sell his media company to the State. In Cebotari v Moldova (no. 35615/06, §§ 46 et seq., 13 November 2007) the Court found a violation of Article 18 of the Convention in a context where the applicant’s arrest was visibly linked to an application pending before the Court. However, such cases remain rare (see, as an opposite example, Sisojeva and Others v. Latvia [GC], no. 60654/00, § 129, ECHR 2007-II). Particularly, the Court notes that there is nothing in the Court’s case-law to support the applicant’s suggestion that, where a prima facie case of improper motive is established, the burden of proof shifts to the respondent Government. The Court considers that the burden of proof in such a context should rest with the applicant.

257. In the case at hand the applicant referred to various sources which confirm his allegations of “improper motive”. First, he invited the Court to consider the facts surrounding his business and political activities, as well as the major policy lines adopted by the President’s administration at the relevant time. Indeed, those facts cannot be ignored. In particular, the Court acknowledges that the applicant had political ambitions which admittedly went counter to the mainstream line of the administration, that the applicant, as a rich and influential man, could become a serious political player and was already supporting opposition parties, and that it was a State-owned company which benefited most from the dismantlement of the applicant’s industrial empire.

258. On the other hand, any person in the applicant’s position would be able to make similar allegations. In reality, it would have been impossible to prosecute a suspect with the applicant’s profile without far-reaching political consequences. The fact that the suspect’s political opponents or business competitors might directly or indirectly benefit from him being put in jail should not prevent the authorities from prosecuting such a person if there are serious charges against him. In other words, high political status does not grant immunity. The Court is persuaded that the charges against the applicant amounted to a “reasonable suspicion” within the meaning of Article 5 § 1 (c) of the Convention.

259. Nevertheless, the combination of the factors mentioned above have caused many people to believe that the applicant’s prosecution was driven by the desire to remove him from the political scene and, at the same time, to appropriate his wealth. The applicant strongly relies on those opinions; in particular, he relies on resolutions of political institutions, NGOs, statements of various public figures, etc. The Court took note of those opinions. However, it must recall that political process and adjudicative process are fundamentally different. It is often much easier for a politician to take a stand than for a judge, since the judge must base his decision only on evidence in the legal sense.

260. Finally, the Court turns to the findings of several European courts in the proceedings involving former Yukos managers and Yukos assets. Those findings are probably the strongest argument in favour of the applicant’s complaint under Article 18 of the Convention. However, the evidence and legal arguments before those courts might have been different from those in the case under examination. More importantly, assuming, that all courts had the same evidence and arguments before them, the Court reiterates that its own standard of proof applied in Article 18 cases is very high and may be different from those applied domestically. The Court admits that the applicant’s case may raise a certain suspicion as to the real intent of the authorities, and that this state of suspicion might be sufficient for the domestic courts to refuse extradition, deny legal assistance, issue injunctions against the Russian Government, make pecuniary awards, etc. However, it is not sufficient for this Court to conclude that the whole legal machinery of the respondent State in the present case was ab intio misused, that from the beginning to the end the authorities were acting with bad faith and in blatant disregard of the Convention. This is a very serious claim which requires an incontrovertible and direct proof. Such proof, in contrast to the Gusinskiy case, cited above, is absent from the case under examination.

261. In such circumstances the Court cannot find that Article 18 was breached in this case.

CASE OF OAO NEFTYANAYA KOMPANIYA YUKOS v. RUSSIA, 08/03/2012 [AK: As regards whether Yukos' prosecution was lawful]

γ. The Court’s assessment

588. The Court notes that in this complaint the applicant company challenged the lawfulness of the Tax Assessments 2000-2003 only in the part linked to the payment of reassessed taxes. The examination will therefore be confined to the question of the lawfulness of the additional tax liability. The Court further notes that the company did not seem to dispute that the relevant laws made it clear what taxes were due, at what rate and when. Rather, the company claimed that in 2000, 2001, 2002 and 2003 it used lawful “tax optimisation techniques” which were only subsequently condemned by the domestic courts in 2004, 2005 and 2006. It also complained that any existing legal basis for finding the company liable fell short of the Convention requirements in respect of the quality of the law and that, in any event, the application of the relevant laws contradicted established practice. Accordingly, the Court has to determine whether the relevant tax arrangements were domestically lawful at the time when the relevant transactions took place and whether the legal basis for finding the applicant company liable was sufficiently accessible, precise and foreseeable.

589. Turning to the first question, the Court would note at the outset that the applicant company disputed the findings of the domestic courts concerning the nature of relations between the applicant company and its trading entities. In view of its conclusion that the tax assessment proceedings in respect of the year 2000 did not comply with the requirements of Article 6 §§ 1 and 3 (b) of the Convention, the Court is required to decide whether the factual assessments made by the domestic courts could be used for the purposes of its legal analysis under Article 1 of Protocol No. 1. In this respect, the Court reiterates that according to its well-established case-law it is not its task to take the place of the domestic courts, which are in the best position to assess the evidence before them and establish the facts. The Court will not, in principle, intervene, unless the decisions reached by the domestic courts appear arbitrary or manifestly unreasonable (see, mutatis mutandis, Ravnsborg v. Sweden, 23 March 1994, § 33, Series A no. 283-B; Bulut v. Austria, 22 February 1996, § 29, Reports of Judgments and Decisions 1996-II, and Tejedor García v. Spain, 16 December 1997, § 31, Reports 1997-VIII) or if the court decisions have been issued in “flagrant denial of justice” (compare Stoichkov v. Bulgaria, no. 9808/02, § 54, 24 March 2005).

590. Having examined the materials of the case and the parties’ submissions and despite its earlier conclusions under Article 6 §§ 1 and 3 (b) of the Convention in respect of the 2000 Tax Assessment (see paragraph 551), the Court has little doubt that the factual conclusions of the domestic courts in the Tax Assessment proceedings 2000-2003 were sound. The factual issues in all of these proceedings were substantially similar and the relevant case files contained abundant witness statements and documentary evidence to support the connections between the applicant company and its trading companies and to prove the sham nature of the latter entities (see paragraphs 14-18, 48, 62-63, 165, 191-193, 212 and 213). The applicant company itself did not give any plausible alternative interpretation of this rather unambiguous evidence, as examined and accepted by the domestic courts.

591. From the findings of the domestic courts and the parties’ explanations, the Court notes that the company’s “tax optimisation techniques” applied with slight variations throughout 2000-2003 consisted of switching the tax burden from the applicant company and its production and service units to letter-box companies in domestic tax havens in Russia. These companies, with no assets, employees or operations of their own, were nominally owned and managed by third parties, although in reality they were set up and run by the applicant company itself. In essence, the applicant company’s oil-producing subsidiaries sold the extracted oil to the letter-box companies at a fraction of the market price. [AK: Here one is tempted to recall Khodorkovsky's open statement on Russian TV, "I’m uninterested in the cosmetic tricks of the judicial bureaucrats. The statement that oil in Siberia has to be sold at Rotterdam prices is too bizarre to comment on."] The letter-box companies, acting in cascade, then sold the oil either abroad, this time at market price or to the applicant company’s refineries and subsequently re-bought it at a reduced price and re-sold it at the market price. Thus, the letter-box companies accumulated most of the applicant company’s profits. Since they were registered in domestic low-tax areas, they enabled the applicant company to pay substantially lower taxes in respect of these profits. Subsequently, the letter-box companies transferred the accumulated profits unilaterally to the applicant company as gifts. The Court observes that substantial tax reductions were only possible through the mixed use and simultaneous application of at least two different techniques. The applicant company used the method of transfer pricing, which consisted of selling the goods from its production division to its marketing companies at intentionally lowered prices and the use of sham entities registered in the domestic regions with low taxation levels and nominally owned and run by third persons (see paragraphs 14-18, 48, 62-63 for a more detailed description).

592. The domestic courts found that such an arrangement was at face value clearly unlawful domestically, as it involved the fraudulent registration of trading entities by the applicant company in the name of third persons and its corresponding failure to declare to the tax authorities its true relation to these companies (see paragraphs 311, 349-353, 374-380). This being so, the Court cannot accept the applicant company’s argument that the letter-box entities had been entitled to the tax exemptions in questions. For the same reason, the Court dismisses the applicant company’s argument that all the constituent members of the Yukos group had made regular tax declarations and had applied regularly for tax refunds and that the authorities were thus aware of the functioning of the arrangement. The tax authorities may have had access to scattered pieces of information about the functioning of separate parts of the arrangement, located across the country, but, given the scale and fraudulent character of the arrangement, they certainly could not have been aware of the arrangement in its entirety on the sole basis on the tax declarations and requests for tax refunds made by the trading companies, the applicant company and its subsidiaries.

593. The arrangement was obviously aimed at evading the general requirements of the Tax Code, which expected taxpayers to trade at market prices (see paragraphs 395-399), and by its nature involved certain operations, such as unilateral gifts between the trading companies and the applicant company through its subsidiaries, which were incompatible with the rules governing the relations between independent legal entities (see paragraph 376). In this connection, the Court finds relevant the warning given by the company’s auditor about the implications of the use of the company’s special fund during the year 2002 (see paragraphs 206-209) and is not persuaded by the applicant company’s reference to case no. A42-6604/00-15-818/01 (see paragraphs 356-357), the expert opinion of its counsel (see paragraph 577) and its reliance on Article 251 (1) 11 of the Tax Code (see paragraph 376).

594. By contrast to the Tax Assessments in issue, the respondent entity in case no. A42-6604/00-15-818/01 was not alleged to have been part of a larger tax fraud and the Ministry failed to prove that it had been sham. The courts established that the entity had some assets, employees and a bank account at the place of its registration and dismissed the Ministry’s claims. As regards the expert opinion and the company’s reference to Article 251 (1) 11 of the Tax Code, the Court finds them irrelevant as they refer to the relations of openly associated companies and not, as was the case at issue, to the use of sham entities fraudulently registered in the name of certain third parties. Thus, the Court cannot agree with the applicant company’s allegation that its particular way of “optimising tax” had been previously examined by the domestic courts and upheld as valid or that it had used lawful “tax optimisation techniques” which were only subsequently condemned by the domestic courts. The above considerations are sufficient for the Court to conclude that the findings of the domestic courts that applicant company’s tax arrangements were unlawful at the time when the company had used them, were neither arbitrary nor manifestly unreasonable.

595. The Court will now turn to the question whether the legal basis for finding the applicant company liable was sufficiently accessible, precise and foreseeable. In this connection, the Court notes that in all the Tax Assessments (see paragraphs 14-18, 48, 62-63, 165, 191-193, 212 and 213) the domestic courts essentially reasoned as follows. The courts established that the trading companies had been sham and had been entirely controlled by the applicant company and accordingly reclassified the transactions conducted by the sham entities as transactions conducted in reality by the applicant company.

596. The courts first decided that the transactions of the sham entities failed to meet the requirements of Article 39 of the Tax Code defining the notion of a sales operation (see paragraphs 48 and 324) as well as Article 209 of the Civil Code describing essential characteristics of an owner of goods (see paragraph 48 and 381). In view of the above and relying on Article 10 (3) of the Civil Code which established a refutable presumption of good faith and reasonableness of actions of the parties in commercial transactions (see paragraph 48 and 382-383), the courts then changed the characterisation of the sales operations of the sham entities. They decided that these were in reality conducted by the applicant company and that it had been incumbent on the latter to fulfil the corresponding obligation to pay various taxes on these activities. Finally, the courts noted that the setting up and running of the sham arrangement by the applicant company resulted in an understating of the taxable base of its operations and, as a consequence, the intentional non-payment of various taxes, which was punishable as a tax offence under Article 122 of the Tax Code (see paragraph 400).

597. Having regard to the applicable domestic law, the Court finds that, contrary to the applicant company’s assertions, it is clear that under the then rules contractual arrangements made by the parties in commercial transactions were only valid in so far as the parties were acting in good faith and that the tax authorities had broad powers in verifying the character of the parties’ conduct and contesting the legal characterisation of such arrangements before the courts. This was made clear not only by Article 10 (3) of the Civil Code relied on by the domestic courts in the Tax Assessment proceedings, but also by other relevant and applicable statutory provisions which were available to the applicant company and other taxpayers at the time. Thus, Article 45 (2) 3 of the Tax Code explicitly provided the domestic courts with the power to change the legal characterisation of transactions and also the legal characterisation of the status and activity of the taxpayer, whilst section 7 of the Law on the Tax Authorities of the Russian Federation granted the right to contest such transactions to the tax authorities (see paragraph 393). In addition, the case-law referred to by the Government indicated that the power to re-characterise or to cancel bad faith activities of companies existed and had been used by the domestic courts in diverse contexts and with varying consequences for the parties concerned since as early as 1997 (see paragraphs 382-393 and paragraphs 428-468). Moreover, in a number of its rulings, including decision of 25 July 2001 no. 138-0 specifically relied upon by the domestic courts in the Tax Assessment proceedings against the applicant company (see paragraphs 384-387), the Constitutional Court confirmed the significance of this principle, having mentioned various possible consequences of a taxpayer’s bad faith conduct.

598. In so far as the applicant company complained that the bad faith doctrine had been too vague, the Court would again reiterate that in any system of law, including criminal law, there is an inevitable element of judicial interpretation and there will always be a need for elucidation of doubtful points and for adaptation to changing circumstances. In order to avoid excessive rigidity, many laws are inevitably couched in terms which, to a greater or lesser extent, are vague and whose interpretation and application are questions of practice (see, among other authorities, Sunday Times, cited above, § 49 and Kokkinakis, cited above, § 40). On the facts, it would be impossible to expect from a statutory provision to describe in detail all possible ways in which a given taxpayer could abuse a legal system and defraud the tax authorities. At the same time, the applicable legal norms made it quite clear that, if uncovered, a taxpayer faced the risk of tax reassessment of its actual economic activity in the light of the relevant findings of the competent authorities. And this is precisely what happened to the applicant company in the case at hand.

599. Overall, having regard to the margin of appreciation enjoyed by the State in this sphere and the fact that the applicant company was a large business holding which at the relevant time could have been expected to have recourse to professional auditors and consultants (see Špaček, s.r.o., cited above, § 59), the Court finds that there existed a sufficiently clear legal basis for finding the applicant company liable in the Tax Assessments 2000-2003.

600. Lastly, the Court observes that the applicant company made a number of additional arguments under this head. In particular, it also alleged that there was no basis in law to deny the repayment of VAT in respect of the export of oil and oil products, that the domestic courts had failed to apply Articles 20 and 40 of the Tax Code, that it should have been dispensed from payment of interest surcharges under Article 75 (3) of the Tax Code and that in respect of the year 2000 the company had been subjected to double taxation in respect of the profits of the sham entities.

601. The Court notes that both Section 5 of Law no. 1992-1 of 6 December 1991 “On Value-Added Tax” governing the relevant sphere until 1 January 2001 as well as Article 165 of the Tax Code applicable to the subsequent period provided unequivocally that a zero rate of value-added tax in respect of exported goods and its refund could by no means be applied automatically, and that the company was required to claim the tax exemptions or refunds under its own name under the procedure set out initially in Letter no. B3-8-05/848, 04-03-08 of the State Tax Service of Russia and the Ministry of Finance and subsequently in Article 176 of the Tax Code to substantiate the requests in order to obtain the impugned refunds (see paragraphs 326-336). In view of the above, the Court finds that the relevant rules made the procedure for VAT refunds sufficiently clear and accessible for the applicant company to able to comply with it.

602. Having examined the case file materials and the parties’ submissions, including the company’s allegation made at the hearing on 4 March 2010 that it had filed the VAT exemption forms for each of the years 2000 to 2003 on 31 August 2004, the Court finds that the applicant company failed to submit any proof that it had made a properly substantiated filing in accordance with the established procedure, and not simply raised it as one of the arguments in the Tax Assessment proceedings, and that it had then contested any refusal by the tax authorities before the competent domestic courts (see paragraphs 49 and 171, 196, 196 and 216). The Court concludes that the applicant company did not receive any adverse treatment in this respect.

603. As regards the company’s argument that Articles 20 and 40 of the Tax Code should have been applied by the domestic courts in their case and that the Ministry’s claims were inconsistent with the above provisions, the Court notes that the Ministry and the domestic courts never relied on these provisions and there is nothing in the applicable domestic law to suggest that they had been under a legal obligation to apply these provisions to the applicant company’s case. Thus, it cannot be said that the authorities’ failure to rely on these provisions rendered the Tax Assessments 2000-2001 unlawful.

604. Finally and in so far as the company disagreed with the interpretation of Article 75 (3) of the Tax Code by the domestic courts and also alleged to have been subjected to double taxation, the Court would again reiterate that it is not its task to take the place of the domestic courts, which are in the best position to assess the evidence before them, establish the facts and to interpret the domestic law. On the facts, the former provision only applied to cases where the taxpayer was unable to pay the tax debt solely due to the seizure of its assets and cash funds (see paragraph 402). The domestic courts established that the company had been unable to pay because of the lack of funds and not because of the injunctions and refused to apply Article 75 (3) of the Tax Code in the applicant’s case (see paragraph 216). The Court does not find this conclusion arbitrary or unreasonable. Likewise, the Court finds nothing in the parties’ submissions or the case file materials to cast doubt on the findings of the domestic courts, which specifically established that the Ministry took account of the sham entities’ profits in calculating their claims so as to avoid double taxation (see paragraph 49).

605. Overall, the Court finds that, in so far as the applicant company’s argument about the allegedly unreasonable and unforeseeable interpretation of the domestic law in the Tax Assessments 2000-2003 is concerned, the Tax Assessments 2000-2003 complied with the requirement of lawfulness of Article 1 of Protocol No. 1.

(b) Whether the Tax Assessments 2000-2003 pursued a legitimate aim and were proportionate

606. The Court is satisfied that, subject to its findings in respect of the lawfulness of fines for the years 2000 and 2001 made earlier, each of the Tax Assessments 2000-2003 pursued a legitimate aim of securing the payment of taxes and constituted a proportionate measure in pursuance of this aim. The tax rates as such were not particularly high and given the gravity of the applicant company’s actions there is nothing in the case file to suggest that the rates of the fines or interest payments can be viewed as having imposed an individual and disproportionate burden, as such, on the applicant company (see Dukmedjian v. France, no. 60495/00, §§ 55-59, 31 January 2006).

(c) Conclusion concerning the compliance with Article 1 of Protocol No. 1 as regards the Tax Assessments 2000-2003

607. Overall, the Court finds that there has been a violation of Article 1 of Protocol No. 1 on account of the 2000-2001 Tax Assessments in the part relating to the imposition and calculation of penalties. Furthermore, the Court finds that there has been no violation of Article 1 of Protocol No. 1 as regards the rest of the 2000-2003 Tax Assessments.
2. Compliance with Article 14, taken in conjunction with Article 1 of Protocol No. 1

(a) The applicant company’s submissions

608. The applicant company argued that the courts’ interpretation of the relevant laws had been selective and unique, since many other Russian companies such as Sibneft and TNK International Ltd. had also used domestic tax havens.

609. The company also submitted that the authorities had tolerated and even endorsed the tax optimisation techniques used by the applicant company in that they had accepted the applicant company’s and its trading companies’ tax returns and payments on a regular basis, and the company’s rate of tax payment had been comparable to or even higher than that of its competitors. In this connection, the applicant company relied on statistical data contained in a report by the Centre for Development, a report of the Financial Research Institute and reports of the Accounts Chamber of Russia. The company also under this heading argued that the legislative framework had permitted the company to use such techniques and that the interpretation of the domestic law in its case had been unique, selective and unforeseeable.

(b) The Government’s submissions

610. The Government responded that the allegations that other taxpayers may have used similar schemes could not be interpreted as justifying the applicant company’s failure to abide by the law. They further contended that the occurrence of illegal tax schemes at a certain stage of Russia’s historical development was not due to failures or drawbacks in the legislation, but rather due to “bad-faith” actions by economic actors and weakened governmental control over compliance with the Russian tax legislation on account of objective criteria, such as the 1998 economic crisis and the difficulties of the transition period.

611. At present, the Government was constantly combating tax evasion and strengthening its control in this sphere. They also referred to statistical data by AK&M and some other news agencies in 2002, which had reported that OAO LUKOIL and OAO Surgutneftegas, two other large Russian oil producers, had posted sales proceeds of RUB 434.92 billion and RUB 163.652 billion and paid RUB 21.190 billion and RUB 13.885 billion in profit tax respectively, whilst the applicant company had posted sales proceeds of RUB 295.729 billion and paid only RUB 3.193 billion in profit tax. The Government submitted that at least two Russian oil majors, OAO Surgutneftegaz and OAO Rosneft, had never engaged in such practices, whilst some, in particular OAO Lukoil, had ceased using them in 2002.

(c) The Court’s assessment

612. The Court will examine this grievance under Article 14 of the Convention, taken in conjunction with Article 1 of Protocol No. 1. This former provision reads:
Article 14 of the Convention

“The enjoyment of the rights and freedoms set forth in [the] Convention shall be secured without discrimination on any ground such as sex, race, colour, language, religion, political or other opinion, national or social origin, association with a national minority, property, birth or other status.”

613. Before considering the complaints made by the applicant company, the Court would reiterate that Article 14 does not forbid every difference in treatment in the exercise of the rights and freedoms recognised by the Convention (see, for example, Lithgow and Others, cited above, § 117). It safeguards persons (including legal persons) who are “placed in analogous situations” against discriminatory differences of treatment; and, for the purposes of Article 14, a difference of treatment is discriminatory if it “has no objective and reasonable justification”, that is, if it does not pursue a “legitimate aim” or if there is not a “reasonable relationship of proportionality between the means employed and the aim sought to be realised” (see, amongst many authorities, Rasmussen v. Denmark, 28 November 1984, §§ 35 and 38, Series A no. 87). Furthermore, the Contracting States enjoy a certain margin of appreciation in assessing whether and to what extent differences in otherwise similar situations justify a different treatment in law; the scope of this margin will vary according to the circumstances, the subject-matter and its background (ibid., § 40).

614. The Court would reiterate that nothing in the case file suggests that the applicant company’s tax arrangements during the years 2000-2003, taken in their entirety, including the use of fraudulently registered trading companies, were known to the tax authorities or the domestic courts and that they had previously upheld them as lawful (see paragraphs 592-594). It thus cannot be said that the authorities passively tolerated or actively endorsed them.

615. As regards the applicant company’s allegation that other domestic taxpayers used or continue to use exactly the same or similar tax arrangements as the applicant company and that the applicant company was the only one to have been singled out, the Court finds that the applicant company failed to demonstrate that any other companies were in a relevantly similar position. The Court notes that the applicant company was found to have employed a tax arrangement of considerable complexity, involving, among other things, the fraudulent use of trading companies registered in domestic tax havens. This was not simply the use of domestic tax havens, which, depending on the exact details of an arrangement, may have been legal or may have had some other legal consequences for the companies allegedly using them. The Court notes that the applicant company had failed to submit any specific and reliable evidence concerning such details. It further notes that it cannot be called upon to speculate on the merits of the tax arrangements of third parties on the basis of data contained in non-binding research and information reports and that therefore it cannot be said that the situation of these third parties was relevantly similar to the situation of the applicant company in this respect.

616. The Court concludes that, in so far as the complaint about discriminatory treatment is concerned, there has been no violation of Article 14 of the Convention, taken in conjunction with Article 1 of Protocol No. 1.

(Republished from Da Russophile by permission of author or representative)
 
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This is a headline in a Western newspaper you might be reading in the not-too-distant future.

Back in October 8th, ten days after Luzhkov’s dismissal from the Moscow mayoralty by Medvedev, I predicted that “within the next 3 months Luzhkov is going to get hit with corruption charges and will either go on trial or seek political asylum in the West”. Today news comes that the corrupt, gay-bashing former Mayor turned up to the British Embassy in Moscow to apply for a visa.

Figures linked to Luzhkov have variously denied these as rumors (such as a spokesman for the construction firm Inteko owned by Luzhkov’s wife Baturina) or claimed he only wanted to visit family in the UK (Iosif Kobzon, a singer and Luzhkov’s friend). But that is only to be expected.

Corruption investigations against the former Mayor’s circle are stepping up, and Luzhkov certainly hasn’t helped himself by portraying his ouster as evidence of the “return of Stalinism” and censorship and repression. (Of course, the city’s corruption-reporting journalists might beg to differ).

If Luzhkov had gone quietly, no doubt the Kremlin would have left him in peace, to enjoy Baturina’s ill-gotten wealth. However, his decision to challenge the Kremlin made this impossible. He might have been unpopular when dismissed, but absence makes the heart grow fonder, and he could prove to be far more of an inconvenience to the Kremlin as an independent maverick than the sorry riffraff that is the current Russian liberal opposition. Why tolerate him, when there would be no problems with charging and convicting him for corruption? There wouldn’t even be any need to rig the courts!

We are seeing yet another beginning of an old theme. Corrupt Russian oligarch (e.g. Berezovsky, Khodorkovsky) or corrupt politician (e.g. Kasyanov) is kicked out of power, and lashes out at the Kremlin for its “authoritarianism” in daring to do so. In the process, they begin to re-brand themselves as born-again liberal democrats and acquire street cred with the liberal opposition and their foreign sponsors.

Whether Luzhkov continues the fight from a courtroom or a London mansion, the Western media is now free to present it as Kremlin persecution of “political dissidence”, further confirming Russia’s (never-ending) slide into authoritarian darkness. No more mention will be made of Luzhkov’s political repression through the libel laws, nor of his Stalinophilia, nor of his homophobia, nor of the rigged contracts and disregard to Moscow’s architectural heritage that made his wife a billionaire. The past will be erased and Putin found to have been responsible for it all along.

This latest development likely just confirms that Luzhkov will opt for London. It’s far safer and more comfortable. As a bonus, he won’t even be too lonely there. Berezovsky is awaiting his arrival, further noting that Luzhkov’s only choice for escaping prison and safeguarding his property is to ask for political asylum in Britain. Listen to him – he’s the expert on this.

UPDATE 10/25: Assuming Luzhkov manages to leave Russia before he is arrested, he appears well set for a pretty comfortable retirement in Britain. His wife is already there, and the couple are suspected of having bought substantial properties in London under a front company. “Last year, [the British] press wrote about Elena Baturina’s purchase … of the largest 18th century residence in London, second only to Buckingham Palace. It has 65 rooms, a ballroom, and more than 3,500 square meters.”

A little Googling shows that the palace is Highgate’s West Hill (photo above). I’m sure the Luzhkovs will make a fine and most fitting addition to the ranks of the British glitterati.

EDIT: This article has been translated into Russian at Inosmi.Ru (Находящийся в изгнании российский диссидент Юрий Лужков осуждает коррумпированный сталинистский режим Путина).

(Republished from Sublime Oblivion by permission of author or representative)
 
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Anatoly Karlin
About Anatoly Karlin

I am a blogger, thinker, and businessman in the SF Bay Area. I’m originally from Russia, spent many years in Britain, and studied at U.C. Berkeley.

One of my tenets is that ideologies tend to suck. As such, I hesitate about attaching labels to myself. That said, if it’s really necessary, I suppose “liberal-conservative neoreactionary” would be close enough.

Though I consider myself part of the Orthodox Church, my philosophy and spiritual views are more influenced by digital physics, Gnosticism, and Russian cosmism than anything specifically Judeo-Christian.