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. Last Updated: 07/27/2016

11/02/1992

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Lawmakers Reject Banks Tax Holiday

A plan by five big U. S. financial institutions to set up an investment bank to buy stocks in Russian firms has hit strong opposition in parliament. President Yeltsin signed a decree on Aug. 26 setting up the joint venture, the Russian American Investment Bank, whose shareholders would include Chemical Bank, the insurer American International Group and the investment banks Rothschild, Wolfenshohn & Co. and Smith Bamey Harris Upham & Co. A closed meeting of the parliament's budget committee considered the decree Friday but objected to key provisions which would grant the bank a five-year holiday from any tax on profits. Alexander Pochinok, chairman of the committee, stated after the meeting, ""Our hair stood on end. The decree does not correspond with the law"". He said the committee would ask the Supreme Soviet teleview Yeltsin's decision. The committee's decision means the decree will no longer automatically become law, but will have to be acted upon by the full parliament.

Aide Blasts Western Leadership

An adviser to President Boris Yeltsin reprimanded Western executives and officials for a one-sided approach in doing business with Russia, stopping just short of accusing them of exploitation. ""We see that many foreign businessmen see Russia as the biggest source of raw materials and just take them from here"", said Nikolai Malyshev, Yeltsin's adviser on science and higher education. ""But those that don't take Russia's pride into consideration and look at it as a place just to take raw materials will not succeed in Russia for long"". Malyshev was the keynote speaker Friday at the first official meeting of The Senior Diplomat and Business Executive Association, which drew about 40 Moscow-based executives and government officials from around the globe. The new organization was created to bring together top-level decision makers to foster better business relations between Russia and the rest of the world.

A Gunboat Diplomacy In the Baltics

There are several good reasons why President Boris Yeltsin might want to get tough with the Baltic states, but none are good enough to justify his halt in the withdrawal of Russian troops from these long-occupied countries, as he did last Friday. NATO, Canada and the U. S. Congress all have weighed in against Yeltsin's decision to halt the pullout. It is a clear case of gunboat diplomacy, no less real for being a refusal by the military to leave than an incursion onto Baltic territory. By his decree, Yeltsin has given the Balts a warning: either they listen to Russian concerns or live with the threat of force, not on their doorsteps but in their kitchens. More than half of the 130, 000 to 200, 000 troops that were stationed in the Baltics have already returned to Russia, but enough remain to frighten a small nation.
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