- The Washington Times - Thursday, March 24, 2005

MOSCOW (AP) — President Vladimir Putin sought to reassure Russia’s jittery business leaders at a Kremlin meeting yesterday, promising to guarantee property rights and not to review the murky 1990s privatizations.

The talks, the first this year between Mr. Putin and the group of so-called oligarchs who control a large chunk of the Russian economy, came amid growing concerns about a worsening investment climate because of widespread corruption and incessant tax demands.

“The government must provide transparent, predictable working conditions for business,” Mr. Putin said according to the Interfax news agency. “This means safeguarding against administrative arbitrariness and fully guaranteeing property rights.”

Mr. Putin said he supported reducing the statute of limitations for contesting privatizations from 10 years to three years — which would safeguard the business empires of Russia’s select club of billionaires who snapped up vast state assets at bargain prices in the chaos of the post-Soviet era.

He said the government was working on proposals for a tax amnesty, conceding that business leaders had “quite a few justified complaints.”

Arkady Volsky, the head of the Russian Union of Industrialists and Entrepreneurs, the main lobbying group for the country’s top businesses, warned ahead of the meeting that conditions were becoming intolerable.

“One cannot continue to live with such a state of affairs any longer,” said Mr. Volsky. He said an improvement in the business climate will be possible only “when there will be order in this country, without daily assassination attempts and continuous changes of the law.”

Last week, Russia’s electricity chief and liberal opposition leader Anatoly Chubais survived a roadside assassination attempt that was blamed on his business enemies or on political motives.

Capital flight from Russia more than tripled to $7.9 billion last year, according to official statistics, in what analysts said was a panic response to the state’s politically driven assault on oil company Yukos.

Yukos, once the No. 1 oil producer in Russia and investors’ favored blue-chip stock, has been dismantled to pay off a staggering $28 billion tax bill for 2000-2003, which in certain years exceeded its total revenue. Its founder and former chief executive Mikhail Khodorkovsky is on trial facing a 10-year jail sentence for tax evasion and fraud.

Mr. Khodorkovsky — once Russia’s richest man with a personal fortune estimated at $15 billion — is thought to have been targeted because he had financed opposition parties that threatened the Kremlin’s grip on power.

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