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Russia

It’s not just the American automotive industry that is facing difficulties these days: the Russian automotive industry is struggling, too. I know, I know. You’re thinking “the Russians have an automotive industry?” It’s no Big 3 (which is perhaps a good thing lately) but it exists. Just barely.

To protect the industry, the Russian government has slapped an increased duty on imported vehicles. It is not a popular tax. As prices soar for what are considered substandard vehicles, Russians have sought out second-hand imports, primarily from neighboring Japan.

This week, a protest against the increased tax in the port city of Vladivostak boasted at least 500 protesters. At least 100 Russian protesters were subsequently detained by police. The arrests won’t stop protestors who are planning more demonstrations in the coming weeks.

An organized tax protest over taxing imports? How very 1773 America of them.

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Svetlana Bakhmina is a pretty famous lawyer in Russia – but for all of the wrong reasons. The 39 year old former junior lawyer for the oil company, Yukos, was arrested on 8 December 2004 on charges of tax evasion and embezzlement. Despite Bakhmina’s protests that she was merely following orders from the powerful oil company’s management, she was painted as the brains behind a series of schemes which resulted in the creation of fictitious debt to avoid taxation and takeover. Bakhmina was eventually convicted and sentenced to seven years in prison for tax evasion and embezzlement.

The conviction received widespread attention in Russia. Some political observers believe that Bakhmina has become the pawn in a political game of revenge. Those observers claim that Russian officials had hoped to prosecute Dimitry Gololobov, a more powerful figure at Yukos, but were not successful. As a junior attorney, Bakhmina became, some claim, a scapegoat. Those claims have been rejected on appeal.

So what makes her case any different than other potentially overzealous prosecution? Bakhmina is a bit of a sympathetic figure in Russia, a fact that has not gone unnoticed in the larger international community. While senior officials escaped jail time, Bakhmina did not. Hardly the face of corporate Yukos, Bakhmina is also a mother to two young boys, who were 2 and 6 years old when she was arrested. The conditions under which she was held while awaiting prosecution were allegedly harsh. Among the criticisms, Bakhmina was not allowed to visit or telephone her children during her sixteen month imprisonment awaiting trial – virtually unheard of in a white collar criminal case.

After her conviction, Bakhmina became pregnant with her third child. She will likely deliver that child in prison in December. She is eligible for parole, having served half of her sentence, but is not hopeful that she will be released. Her plight, that of a young mother allegedly taking the fall for corporate greed in modern Russia, is hardly the face that the Russians wanted to share with the world.

Russians have appealed to Russian president Dmitry Medvedev to pardon Bakhmina. So far, that appeal has fallen of deaf ears, despite support from such high profile Russians as former Soviet leader Mikhail Gorbachev, who has said: “Why does she have to be kept behind bars? In this case he should make use of his right to issue a pardon.”

Bakhmina’s supporters have now launched a global campaign, posting an online petition directed to Medvedev in English, Russian, Italian, Spanish and French. The petition says:

Dear Mr. President,

Please attend to the case of Svetlana Bakhmina, a Russian citizen sentenced to a 6.5 years’ imprisonment term. In May 2008, she served half of her term. According to Russian laws, she may be released on parole.

Svetlana has two sons, aged seven and eleven. Moreover, now she is expecting her third child, which is due in December. Now Svetlana is in prison hospital. Nonetheless, the court has twice refused to release her on parole.

Mister President, we know that under the Constitution of Russian Federation, you may pardon Svetlana Bakhmina.

We, the undersigned, urge you to pardon her.

We believe that by doing so you will demonstrate to the people of Russian Federation and to the whole world that mercy and respect of human rights are the corner stones of a strong civilized state.

To date, 72,321 signatures have been attached to the petition. Supporters include those from Russia, Ukraine, Belarus, Latvia, Poland, United States, Canada and Israel.

As support for Bakhmina’s release grows, as well as international coverage of her situation, it will be interesting to see how Medvedev responds. For now, the Russian government refuses to discuss the appeal. According to the German newspaper Süddeutsche Zeitung, a Kremlin spokesperson has said that Medvedev “definitely knows about the appeal for clemency, but he has not made a decision yet.”

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And in Russia…

September 25, 2007 · 0 comments

Not to be outdone by the Irish, the Russian tax authorities are making noise about a crackdown on taxes paid by the super-rich. However, as opposed to tax breaks, the Russian Federal Tax Service is concentrating on tax evasion as a source of wealth.

There’s no question that there is a giant disparity in the gap between rich and poor in Russia. While many citizens are struggling to find affordable housing and pay for food in an economy that is not exactly booming, Forbes reported that 52 of the billionaires on its rich list were Russian.

What is certain is that some sort of “interregional tax inspectorate” will be created to monitor the income and tax reporting of the super rich. What is not certain is when that might happen. Some agencies are reporting that the inspectorate will begin activities within the next few days. However, the Federal Tax Service is denying that time line, claiming that there are no plans in the “near future” (whatever that means).

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