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BELARUSIAN PRESIDENT DEFENDS RUSSIA'S STANCE ON GAS. Alyaksandr Lukashenka said on 31 December that the different prices Russia charges his country and Ukraine for gas are reasonable given the circumstances, ITAR-TASS reported on 1 January. "Russian-Belarusian friendship is not the reason for inexpensive gas supplies at $46.68 per 1,000 cubic meters," Lukashenka said, adding that Belarus charges Russia considerably less to transport gas across its territory. "If Ukraine sets the world price for transit of Russia's gas via its territory, the supply price should [also] meet world standards," he said. The Belarusian president added that Ukraine's decision to seek NATO membership means that joint defense systems with Russia "will be ruined," a development that "will inflict multi-billion-dollar losses on Russia." BW

FORMER UKRAINIAN PRIME MINISTER REPORTEDLY LAUNDERED MONEY THROUGH LITHUANIAN BANKS... According to a 4 January report in the Lithuanian newspaper "Lietuvos rytas," former Ukrainian Prime Minister Pavlo Lazarenko laundered money through Lithuanian banks, Interfax-Ukraine reported. The "Lietuvos rytas" article cited data from the FBI and the Lithuanian Financial Crime Investigation Service. "Lazarenko included Hermis bank, which was prosperous then, in his schemes of money laundering in 1998 and transferred $30 million, gained illegally, to the bank's accounts," the report stated. In late 1999, according to the report, the funds were transferred to SEB Vilniaus bankas, which bought out Hermis bank. "This money is in an account of this bank to this day," the report stated. Lazarenko was arrested in the United States in February 1999 for money laundering. He was found guilty on 14 charges related to money laundering and fraud, each carrying a term of imprisonment of 20 years. BW

...AS ELECTION COMMISSION REFUSES TO REGISTER HIM AS PARLIAMENTARY CANDIDATE. Ukraine's Central Election Commission on 3 January refused to register Lazarenko as a candidate in the country's March parliamentary elections, Interfax-Ukraine reported the same day. The CEC said that it could not register Lazarenko because he had not lived in Ukraine for five years prior to election day, as required by law. It marked the second time the commission has refused to register Lazarenko as a candidate. The former prime minister's party list, Lazarenko's Bloc, was registered on 27 December 2005, but the commission at that time also refused to register Lazarenko himself as a candidate. BW

SERBIA HIT BY RUSSIA-UKRAINE GAS CRISIS. The Hungarian gas company MOL announced on 3 January that it will cut supplies to Serbia by half due to the ongoing gas conflict between Russia and Ukraine, B92 reported the same day. Serbian Gas Director Milos Tomic said Belgrade is receiving 50 percent less gas than usual from MOL. But while deliveries to larger Serbian companies have been cut, Serbian citizens have not yet been affected. "Serbian Gas works under the Energy Law as far as the import and export of gas is concerned, and by those regulations the first priority is heating for citizens, schools, health facilities, and food producers. Everyone else, who will not be able to sustain its work with the amount of natural gas we have, or other fuel sources, will be shut down. The situation is very serious," Tomic said. Tomic added that Serbian Gas signed an agreement with Gazprom for all of 2006 and it will be extremely difficult to find alternative gas from another source. BW

RUSSIA, UKRAINE REACH COMPROMISE GAS DEAL... Gazprom and Ukraine announced on 4 January that they have reached a compromise deal on natural gas prices, Russian and international news agencies reported the same day. Under a complicated arrangement, Gazprom will sell gas to an intermediary, RosUkrEnergo, for $230 per 1,000 cubic meters. RosUkrEnergo, which is a joint venture between Gazprom and Austria's Raiffeisen Investment, will in turn sell gas to Ukraine at $95 per 1,000 cubic meters. Russia will also pay higher rates to ship gas via pipelines across Ukrainian territory. According to the agreement, the new rate will be $1.60 per 1,000 cubic meters per 100 kilometers, an increase from the $1.09 per 1,000 cubic meters per 100 kilometers Russia had been paying. The deal ends a tense standoff that saw Gazprom shut off Ukraine's gas supplies on 1 January, affecting supplies to Western Europe. BW

...TO SATISFACTION OF BOTH SIDES. Oleksiy Ivchenko, the head of Ukraine's state gas company Naftohaz Ukrayiny, praised the compromise deal between Ukraine and Gazprom on 4 January, saying it benefitS both parties, Interfax reported. "We are satisfied with the outcome of our negotiations. We reached mutually beneficial and therefore mutually acceptable agreements, which will allow us to fully meet Ukraine's gas needs, on the one hand, and ensure the transit of Russian gas intended for Europe, on the other hand," Ivchenko said in Moscow after talks with Gazprom CEO Aleksei Miller. "Consequently, I believe that we are switching to market principles, which will allow us to meet our companies' needs," Ivchenko added. Miller said that "the agreements will provide additional security guarantees to gas exports to Europe and act as a sound foundation for further cooperation between Russia and Ukraine in the gas sector based on market principles." BW

MOTHERLAND LEADER SEEKS TO END RENT PAYMENTS TO UKRAINE FOR BLACK SEA FLEET... Dmitrii Rogozin, the leader of the nationalist Motherland party, sent a letter to senior Russian officials on 3 January asking them to place the issue of the Black Sea port of Sevastopol on the agenda with Ukraine, Interfax reported the next day. Sevastopol, which is on Ukrainian territory, hosts Russia's Black Sea Fleet. "Russia has every legal ground not to pay Ukraine any rent" on the Russian Black Sea Fleet deployed in Sevastopol, Rogozin said. "Sevastopol remains a Russian city from a legal standpoint," he added. "We insist on a revision of an increasingly dubious section of the underlying treaty ratified in 1997 that deals with Sevastopol rent payments," he said. BW

...WHILE DEFENSE MINISTER SAYS RENT AGREEMENT VALID UNTIL 2017. Sergei Ivanov told vesti.ru on 2 January that there is no justification for recent discussions in Ukraine about raising the rent that Russia pays for using facilities in Sevastopol for the Black Sea Fleet. Ivanov argued that the current rent agreement is valid until 2017 and that Ukraine in general and Sevastopol in particular have made money on it. In response to a question about the problem of a lack of housing for officers and their families, Ivanov said that housing for military personnel is the army's most serious problem and can only be resolved over time and with strong support from the state budget. Ivanov was more optimistic about the modernization of the military, saying that much progress has been made recently. PM

PROMINENT POLITICIAN SAYS PUTIN IS MANIPULATING UKRAINIAN TENSIONS... Prominent Russian politician Grigorii Yavlinskii told RFE/RL's Russian Service on 3 January that President Vladimir Putin has "created an antagonism between Russia and Ukraine" in order to "unite the people around the government." The leader of the liberal Yabloko party stressed that "the principal mistake of...Putin's current policy is [to forget] that Russia's [prospects] in the 21st century are good only if it becomes integrated into European structures and generally redirects itself towards Europe." Yavlinskii added that he is "not talking about Brussels, but about European civilization in its entirety. Right now, instead of helping Ukraine move along and moving along with it, Russia is uselessly trying to not let her do so, and is itself trying to pursue some sort of 'third way' [in political development]. In reality, there is no 'third way'; there is only the Third World" as an alternative. Yavlinskii noted that the pro-Putin Unified Russia party distributed leaflets in the recent Moscow election with the slogan that "the citizens are the government's best helpers." He stressed that "everything done...by the Russian propaganda machine during the past month has been an attempt to persuade its citizens to regard a people with whom they are very close, with whom they have lived for centuries, as their enemy, in order to consolidate them around the powers-that-be." PM

...AND DISTRACTING ATTENTION FROM GAZPROM'S OWN PROBLEMS... Yavlinskii told RFE/RL's Russian Service on 3 January that the government "campaign" against Ukraine is aimed at diverting attention from important issues involving the state-run gas monopoly Gazprom itself. He argued "the campaign is not over, but I think part of it [involves displaying] irritation with Ukraine and talk of Ukrainians stealing gas, instead of [addressing] corruption in Russia and [the issue of] where Gazprom's money is really going. Indeed, it is a means of diverting attention, which will have a significant impact for at least some time. In any case, [the authorities] have succeeded so far because they have all possible instruments of propaganda at their disposal." PM

...AS QUESTIONS ARISE ABROAD. On 1 January, Russia assumed the rotating presidency of the Group of Eight (G-8) leading industrial countries, to which it was admitted in an effort to promote free market reforms in the 1990s and help ensure the safety of the former Soviet Union's biological, chemical, and nuclear stockpiles, mosnews.com reported. President Putin reportedly intends to use the upcoming G-8 summit in St. Petersburg to focus attention on energy security in an effort to parlay its oil and gas reserves into political power and influence. International media noted on 3 January that Russia's behavior in the dispute with Ukraine over gas prices has prompted some countries like Poland, the Czech Republic, Slovakia, and Hungary to take steps to reduce their dependency on Russian energy supplies. The "Frankfurter Allgemeine Zeitung" stressed that Moscow's use of gas as a political weapon serves as a warning to Germany against relying too much on Russian energy suppliers, noting that the old argument that Russian deliveries have always been reliable no longer stands. The German daily also questioned the wisdom of the North European Gas Pipeline (NEGP) project in light of Moscow's apparent willingness to manipulate energy deliveries for political purposes (see "RFE/RL Newsline," 12 December 2005). PM

TURKMENISTAN CONFIRMS LOW-COST GAS SUPPLIES FOR UKRAINE. Turkmen President Saparmurat Niyazov confirmed on 3 January that Turkmenistan has agreed to deliver low-cost supplies of natural gas to Ukraine, Asia-Plus and ITAR-TASS reported. The agreement, reached in a telephone conversation with Ukrainian President Viktor Yushchenko, calls for the supply of 40 billion cubic meters of gas to Ukraine at a price of $50 per 1,000 cubic meters for 2006. Niyazov's confirmation of the agreement follows several days of confusion and contradictory media reports (see "RFE/RL Newsline," 27 and 29 December 2005). RG

UZBEKISTAN IMPOSES NEW PRICE RISE ON TAJIK GAS IMPORTS. The head of Tajikistan's Tojikgaz state-owned gas company, Huseyn Aliev, announced on 3 January in Dushanbe that Uzbekistan has drastically increased the price it charges Tajikistan for natural gas, ITAR-TASS reported. The price rise, of nearly one-third, results in an immediate increase from $42 to $55 per 1,000 cubic meters of gas. As Tajikistan normally imports 95 percent of its natural gas from Uzbekistan, it will be especially vulnerable to the increase, seemingly modeled after Russia's sudden price increase for gas supplies to Ukraine. In late 2005, Uzbek officials warned of plans to increase gas prices for all users, including Kyrgyzstan and Kazakhstan, citing increased extraction and transport costs (see "RFE/RL Newsline," 25 October 2005). RG