Russia 090804 Basic Political Developments

New Raid Worries Market Vendors

http://www.themoscowtimes.com/article/600/42/380150.htm
04 August 2009 By Anna Malpas / The Moscow Times

Police said Monday that they had interrupted a major smuggling operation at the Sevastopol market in southern Moscow, raising concerns among foreign merchants that many legitimate import businesses would be caught up in a crackdown on counterfeiting.

Traders have been locked out of the market since police raided it Friday and confiscated $29 million in goods, which they said were either fake or dangerous. The investigation comes just over a month after the vast Cherkizovsky Market was shuttered amid similar claims, leaving thousands without work and billions of dollars of goods impounded.

The closure of Cherkizovsky has also dented relations between Russia and China. Beijing sent a high-level delegation to Moscow last month to negotiate on behalf of its citizens but failed to win any major concessions.

The Interior Ministry said in a statement Monday that its economic security department “closed a major channel for smuggling consumer goods produced in China” at the Sevastopol market.

The traders there come primarily from Afghanistan, India and Pakistan, said Madzhumder Mukhammad Amin, president of the Migrants the of Russian Federation.

“People are worried. Their business is there, and their goods are there,” Amin said. The hotel complex includes storerooms, he said.

“It wasn’t like Cherkizovsky. Everything was official, there were contracts,” he said.

The market is based in a hotel complex near the Sevastopolskaya metro station. Two 15-story buildings at the Soviet-era complex have been used for trading since the early 1990s.

The hotel rooms were converted into stalls selling clothes, jewelry and knickknacks at knockdown prices. Customers pay an entrance fee and then climb narrow stairs between floors or use crowded lifts.

Police arrested apparently counterfeit goods worth at least 900 million rubles ($29 million), the statement said, adding that the merchandise came from India, Afghanistan, China and Turkey.

“A significant part of the clothes, accessories and perfume of famous brands had signs of counterfeit production,” the statement said.

A “large quantity” of children’s toys smelt strongly of phenol, it said. Tests found that the toys broke health and safety standards.

Investigators also found “counterfeited documents” in delivery trucks showing that the goods went through customs in the northwestern and central regions.

Monday’s statement comes after the Investigative Committee announced on Thursday that an organized criminal group, which included customs officials, was charged with smuggling goods headed for the Sevastopol market.

Those charged include the head of the Serpukhovskaya branch of the customs office in Podolsk and an inspector there. Investigators also charged the general director of Rostek-Serpukhov, which runs a customs warehouse in the Moscow region, and employees from customs broker Krug, the statement said.

If convicted, the suspects face up to 12 years in jail.

Eight trucks were searched, and the suspects are thought to have carried out more than 100 trips between November 2008 and April this year, investigators said, adding that they had established that the goods were stored and sold at the Sevastopol market.

Sammy Kotwani, president of the Indian Business Alliance, estimated that 50 to 60 Indian businessmen trade there.

“They don’t know what is happening. They are still waiting outside, and they have no information,” Kotwani said Monday afternoon.

The Indians who work there “are all small-time businessmen, small traders,” Kotwani said. Some are ethnic Indians who lived in Afghanistan.

As of March 31, the hotel complex was fully owned by Buxton Asset Management and Torrington Asset Management, both registered in the British Virgin Islands, according to documents posted at the corporate governance web site Open.vestnikao.ru.

Sevastopol general director Failya Alyautdinova did not respond to requests for comment Monday.

Migrants were promised access to their stalls on Tuesday morning at 9 a.m. but are worried that they won’t be able to get to storage rooms and that police will confiscate their goods overnight, said Amin, president of the migrants federation, after visiting the Sevastopol market on Monday evening.

“The head of the investigative group personally promised me that there would be access [to storerooms],” Amin said.

The problems at the Sevastopol market threatened to compound the situation surrounding Cherkizovsky’s closure on June 29, as many of the vendors have sought work at other markets — threatening jobs and raising rents.

Vedomosti reported Monday that most Cherkizovsky traders were going to the Luzhniki and Moskva markets in southeastern Moscow.

Rent for a stall has more than doubled at Moskva, going up from 120,000 rubles ($3,860) per month to 250,000 or even 450,000 rubles, a trader told Vedomosti. A spokesman for Moskva said there used to be 3,000 Chinese traders at the market, but numbers have grown to 3,600 since Cherkizovsky closed.

Activists from a group called Anti-Cherkizon announced plans Monday to block the Moscow Ring Road, or MKAD, calling for the management at the Sadovod market in southeastern Moscow to stop accepting traders from Cherkizovsky.

A high police presence was brought in to stop the unsanctioned protest, RIA-Novosti reported.

The Sadovod market’s workers also protested the influx on July 13.

Moscow's Largest Market To Be Replaced with Billion-Dollar Chinatown

http://english.pravda.ru/business/finance/03-08-2009/108577-market-0

03.08.2009

The Moscow Government and a Chinese delegation from the Chinese Ministry for Commerce took a decision to construct a new shopping center instead of the infamous Cherkizovsky Market, which is the largest market in Europe. A spokesman for the Moscow authorities, Vladimir Malyshkov, said that China was ready to invest $1 billion in the construction of the new center. The complex is supposed to include a shopping center, a logistics center, a customs point, a two-star hotel and a migration service department, The Kommersant newspaper reported.

The closure of the Cherkizovsky Market in June 2009 alarmed the Chinese authorities. Up to 70 percent of 100,000 people, who worked at that market, were the Chinese citizens. A great amount of goods produced in China remains on the territory of the closed market. The goods are reportedly worth $5 billion.

“Russia and China have reached a consensus on the issue of the Cherkizovsky Market. Our countries will draft a joint plan of fighting against gray imports,” Deputy Commerce Minister Gao Hucheng reported after the negotiations with Moscow authorities.

The new complex, designed to replace the Cherkizovsky Market may occupy a part of the territory of the closed market. Several other sites near the Moscow ring road with areas of 40-60 hectares are also being considered.

“Such districts are known as Chinatown around the world, but I don't like the name. On the other hand, we have an Armenian Trade Center, so why not having a Chinese one too?” Malyshkov said.

The construction of the new complex will most likely take two years.

New Cherkizovo market may be constructed around Moscow

http://en.apa.az/news.php?id=105808

[ 04 Aug 2009 10:51 ]

Baku – APA. Lenin district administration of Moscow province plans to construct a wholesale trade center for foreigners working in Cherkizovo market, APA reports quoting the Kommersant.

The representatives of Chinese Diaspora offered Lenin district administration to construct a trade center covering 40 ha area.

The new market may be constructed in the territory of Salaryevo and Nikolokholamsk village. The area is between the cemetery and the place of industrial waste. Experts consider that the company owning the area may sell it for $20 million.
The delegation of the Chinese government held talks with their Russian colleagues concerning the citizens who became unemployed after the closure of Cherkizovo market. The results of the talks were not released. Moscow mayor Yuri Luzhkov stated that he was not going to deal with the employment of tradesmen of the closed market.
Cherkizovo market, the biggest market of Moscow, was closed on June 29, 2009. As a result of it, over 100,000 tradesmen from various countries became unemployed. There are Azerbaijanis among them, too.

Yavlinsky Meets Medvedev

http://www.themoscowtimes.com/article/1010/42/380148.htm

Grigory Yavlinsky, the former leader of Yabloko, met with President Dmitry Medvedev last week and secured his support for the party’s bid to run in the Moscow City Duma elections this fall, Nezavisimaya Gazeta reported Monday, citing a Kremlin source.

The source said the country’s leadership informed Mayor Yury Luzhkov that he should not hinder the liberal party’s campaign. Luzhkov announced last week that he would head the United Russia ticket in the city council elections. (MT)

Assets Laws Reviewed

http://www.times.spb.ru/index.php?action_id=2&story_id=29562

ST. PETERSBURG (Bloomberg) — Russia’s investigative committee of the prosecutor general’s office wants to extend punitive measures for economic crimes by confiscating assets even if they were transferred to others, Vedomosti reported.

The state should be able to recover ill-gained property or funds by seizing them from relatives and associates of those convicted of crimes such as embezzlement, the newspaper said, citing an interview with Alexander Bastrykin, head of the investigative committee.

Current legislation, which already allows for confiscating assets, is only applied in 10 out of 100 cases, Bastrykin told Vedomosti. Those convicted of economic crimes may be able to escape prison terms by compensating the state with money or property, he added.

Moscow Comes Closer

http://www.times.spb.ru/index.php?action_id=2&story_id=29562

ST. PETERSBURG (Bloomberg) — Russian Railways, the country’s railroad monopoly, said its new high-speed Sapsan trains manufactured by Siemens will halve travel time between Moscow and St. Petersburg, the country’s two biggest cities.

The train completed its first test run Thursday, reaching an average speed of 160 kilometers to 250 kilometers per hour, allowing it to cut travel time between the two cities to 3 hours 45 minutes from as long as 8 hours, the Moscow-based company said Thursday in an e-mailed statement.

Russian Railways plans to begin operating the new link in December. In May 2006, the state-run monopoly signed a 276 million-euro ($388.4 million) contract with Siemens, Europe’s biggest engineering company, for eight high-speed trains and agreed the following April to pay 354.1 million euros to receive technical support for 30 years, according to the statement.