Lufthansa Says Accounts Unfrozen

Lufthansa said Thursday that the Federal Tax service had unfrozen bank accounts that had been frozen since late last month, Interfax reported.

A spokesman for Lufthansa said the airline could now use its accounts in Russia, but that "we do not consider the problem completely settled," the news agency reported.

The tax authorities froze the accounts Feb. 19 over demands that the airline pay between $7.4 million and $10.3 million, an industry source familiar with the situation said at the time, requesting anonymity because of the sensitivity of the issue. "There is disagreement about the interpretation of tax regulations," he said

Lufthansa, which flies to 18 destinations in Russia and the CIS, has had difficulties with the country's tax authorities before. In 2002, it refused to pay a 20 percent value-added tax on ground handling services, arguing that this amounted to a violation of international agreements to which Russia was a party.