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. Last Updated: 07/27/2016

Business in Brief

$1Bln Arms for Greece

MOSCOW (Prime-Tass) -- Military equipment exports to Greece will exceed $1 billion in 2002-05, Deputy Defense Minister Mikhail Dmitriyev said Tuesday.

In 1998-2001, Russia supplied military equipment worth $1.1 billion to Greece.

"We will be able to reach this level by the end of 2005," Dmitriyev said. "Greece is the only NATO member that actively cooperates with Russia in the military sector," he added.

"We have completed the contract to supply the S-300 [SA-12 Gladiator] and Tor [SA-15 Gauntlet] anti-aircraft missile systems," he said.

He added that supplies of AT-14 Cornet anti-tank missile systems are ongoing.

Russia also supplied two Zubr landing hovercraft and is now building a third one for Greece, he said.

The country's total arms exports totaled $4.8 billion in 2002.

1/4 GDP 'in Shadows'

MOSCOW (Prime-Tass) -- The shadow economy accounts for as much as 20 percent to 25 percent of gross domestic product, Security Council deputy head Vyacheslav Soltaganov told a conference on money laundering Tuesday.

"Despite all the measures [to tackle the problem] the economy sustains huge losses as profits fall in different industries, including alcoholic drinks production, transport, fuel and the financial sector," Soltaganov said.

He mentioned refunding of value-added tax to exporters as one of the ways to launder money, saying that last year VAT refunds came to 240 billion rubles ($7.8 billion) compared to 40 billion rubles in 1999.

The country's exports were worth $106.936 billion last year, up 5.2 percent.

He also said that capital flight from Russia amounted to $12 billion, or about one-third of the federal budget's revenues.

In 1999 the figure is estimated to have stood at $24.8 billion.

Kaspersky in Japan

MOSCOW (Prime-Tass) -- Kaspersky Labs, the information security specialist and anti-virus software producer, has opened a representative office in Japan, the company said in a statement Tuesday.

The office was set up on a joint basis with the company's Japanese partner iMEX Co. Ltd., which develops integrated information security solutions.

The new company will focus on the small and medium-sized business market, as well as actively pursuing technology sales where Kaspersky Labs' technologies are incorporated into solutions developed by third parties, the statement said.

This "mixed focus" business model is designed to achieve optimal business results during the market entry stage, as well as generating maximum brand recognition, the company said.

"We are confident that the combination of our high-end technologies, our 14 years of experience and our professionalism will allow us to become a major player on the Japanese information security market within the next three years," Daizo Yamaoka, CEO of Kaspersky Labs Japan, said in the statement.

$60M Aeroflot Loan

MOSCOW (Reuters) -- Flagship carrier Aeroflot has received a $60 million loan from a consortium of local and foreign banks to finance current activities and development, the sides said Tuesday.

Aeroflot general director Valery Okulov said the loan was the largest obtained by the company.

"This is the biggest and most successful, advantageous credit," Okulov said at the signing ceremony. "Three percent over LIBOR is very good."

He said the loan had been granted with Aeroflot revenue as collateral. Aeroflot's 2002 revenue to international accounting standards was $1.56 billion.

The 10-member consortium is led by Russia's second biggest bank, Vneshtorgbank, Citibank and Donau Bank AG, Russia's Central Bank subsidiary abroad.

White Sea Export Halt

ST. PETERSBURG (Reuters) -- The government has halted fuel oil exports from a White Sea floating terminal after the regional governor protested against an oil spill.

The governor of the northern Arkhangelsk region, Anatoly Yefremov, said in a statement that he had ordered Russia's largest river shipping firm, Volgotanker, to halt deliveries of fuel oil to the terminal.

"I have halted all Volgotanker operations in the region starting Sept. 16 until it fully eliminates all negative effects of its work on the White Sea," the statement said.

Volgotanker, which annually ships up to 11 million metric tons of oil and oil products by river to oil export ports on the Black Sea and the Gulf of Finland, began testing a new export route this year by shipping fuel oil from northern refineries to the floating terminal.

It has estimated the capacity of the new route, which works six months a year in the ice-free period, at 800,000 tons of fuel oil.

An oil spill occurred this month from one of Volgotanker's cargoes when it was loading fuel oil into the floating terminal.

Regional authorities say some 400 kilograms of fuel oil leaked from the tanker, while local ecologists say the damage was much bigger and put the figure at 50 tons.

Oct. 1 Oil Duty Hike

MOSCOW (Reuters) -- Prime Minister Mikhail Kasyanov has signed a resolution raising from Oct. 1 the export duty on crude oil to $33.80 per metric ton from the current $25.10, the government said Tuesday.

The resolution, published on the government web site ( also raises oil products export duty from Oct. 1 to $30.40 per ton from the current $22.60.

The government sets duties for crude oil and refined products every two months after monitoring prices of its main crude oil export blend, Urals, on world markets to get an average price.

NW Telecom Soars

ST. PETERSBURG (Reuters) -- North-West Telecom, the state fixed-line phone company in the northwest, expects to more than double its net profit in 2003, its deputy chief executive said Tuesday.

The net profit forecast of 800 million rubles ($26 million), provided by Alexander Shalagin during an Internet news conference, compares with 327.26 million rubles for 2002, with both figures based on Russian accounting standards.

The company had a first-half 2003 net profit of 644.7 million rubles. Shalagin forecast a lower net profit in the second half due to delayed costs, higher interest expenses and an increase in provisions for doubtful accounts.

North-West Telecom was created last year as part of the reorganization of state telecoms holding company Svyazinvest by merging several regional operators with St. Petersburg Telephone.

EBRD Passes on Banks

MOSCOW (Prime-Tass) -- The European Bank for Reconstruction and Development has no plans to buy stakes in London-based Moscow Narodny Bank, or in any other foreign subsidiaries of Russian banks, said Jeffrey Hiday, EBRD's head of media relations.

"We will only invest in domestic Russian operations," Hiday said. "We won't touch the foreign operations of any Russian bank," he added.

Central Bank Chairman Sergei Ignatyev said Monday that the National Banking Council plans to consider the Central Bank's withdrawal from the capital of its foreign subsidiaries at the end of September.

The International Finance Corp., the private sector investment arm of the World Bank, has expressed interest in purchasing a stake in MNB.

The Central Bank holds 88.89 percent in MNB.

Gazprom Eurobond

LONDON (Reuters) -- Gazprom offered a 1 billion euro, seven-year bond for sale Tuesday, lead managers Deutsche Bank and UBS said.

The loan participation notes were issued via Gaz Capital SA and mature on Sept. 27, 2010.

The bond pays a coupon of 7.8 percent, and was priced at par to yield 398 basis points over the 5.25 percent July 2010 Bund, or 387 basis points over the benchmark swaps curve.

The deal, which was increased ahead of launch from 750 million euros, was issued under Gazprom's $5 billion debt program.

Gazprom said Monday that the bond sale was oversubscribed, hence the increase in size.