BUSINESS LEADER ON LAW ENFORCEMENT CORRUPTION

UNCLAS SECTION 01 OF 02 MOSCOW 001619 SENSITIVE SIPDIS E.O. 12958: N/A TAGS: ECON PGOV PHUM PREL KCRM KJUS SNAR RS SUBJECT: BUSINESS LEADER ON LAW ENFORCEMENT CORRUPTION MOSCOW 00001619 001.2 OF 002 THIS CABLE IS SENSITIVE BUT UNCLASSIFIED, NOT FOR INTERNET DISTRIBUTION REFTEL: MOSCOW 02477 ¶1. (SBU) Summary: On June 12, Resident Legal Advisor (RLA) met with Yanna Yakovleva, the head of Business Solidarity, a NGO dedicated to protecting Russian businesses from government extortion. Yakovleva expressed appreciation for a recent joint project with the Embassy that had changed the law on pre-trial detention to require prosecutors to support detention applications with evidence in court. However, she expressed concern that some agents of the State Narcotics Control Agency (FSKN) are threatening small and medium sized-businesses with bogus criminal charges if they do not give in to FSKN extortion demands. Recent abuses include criminal prosecutions of bakers for using poppy seeds in food preparation, veterinarians for using anesthetics in performing routine operations on pets, and pharmacists for distributing analgesics. Yakovleva said that many of these abuses are made possible by poorly drafted money laundering laws and sought RLAQs assistance in a campaign to redraft them. She also said that she hopes to participate in the civil society summit scheduled to take place during President ObamaQs visit to raise issues of business protection. End Summary. -------------- BUSINESS SOLIDARITY -------------- ¶2. (SBU) Yakovleva, who runs a chemical company, started Business Solidarity after FSKN agents attempted to extort her by offering QprotectionQ to her business. When she refused, they brought criminal charges against her in 2006 for distributing diethyl-ether, a chemical solvent whose distribution is not criminalized by Russian law. Eventually, the Supreme Court ruled that the case had no legal basis. Prosecutors dropped all charges and admitted that no laws had been broken. However, in the meantime, she and her business partner had spent seven months in jail. (REFTEL). -------------- PRE-TRIAL DETENTION -------------- ¶3. (SBU) Upon her release in 2007, YakovlevaQs first goal was to reform the law on pre-trial detention, which, at the time, made it easy for investigators to obtain an order detaining a suspect based on little or no evidence. She focused on this issue because, she explained, even if a case has no legal merit, extended detention is �00A;enough to break most people and ruin their businesses. Therefore, the simple threat of detention is enough to make most business owners capitulate. ¶4. (SBU) Yakovleva sought the EmbassyQs support and in October 2008, the Law Enforcement Section (LES),Business Solidarity and the Public Chamber organized a conference on international standards of pre-trial detention, featuring presentations by a U.S. judge and an expert from the European Court of Human Rights. As a result of the conference, Russian law was changed in December 2009 to require judges to base detention orders only on evidence presented and verified in court hearings. (Previously, the law had allowed detention solely on the basis of prosecutorsQ claims, without any supporting evidence, thereby making it very easy for prosecutors to detain almost anyone.) -------------- MONEY LAUNDERING -------------- ¶5. (SBU) Yakovleva said that despite these changes, FSKN and other law enforcement agencies continue to terrorize businesses. In particular, she noted the disturbing trend of bakery owners being threatened with prosecution for purchasing large quantities of poppy seeds for culinary uses, veterinarians being prosecuted for using anesthetics in operations on pets, and pharmacists being threatened with prosecution for distributing pain killers. She said that a pharmacist had recently been sentenced to 7 years for Qillegal entrepreneurshipQ and money laundering for distributing pain killers without a license, an absurd result given that dispensing prescription drugs without a license is, at most, an administrative, rather than criminal, offense. ¶6. (SBU) According to Yakovleva, many of these cases are made possible by a broadly drafted article in the Criminal Code on money laundering, which carries a 15 year sentence. The law, she said, makes it easy for investigators to charge a business owner with a MOSCOW 00001619 002.2 OF 002 relatively minor offense based on an administrative violation, tack on money laundering charges on the theory that all of the business profits are illegal proceeds of the violation, and threaten a long prison term if the business owner does not pay. ¶7. (SBU) To address this problem, Yakovleva is starting a campaign to re-write the money laundering laws and requested RLAQs assistance in compiling materials on U.S. law and international standards, drafting proposed amendments and organizing a conference. (Note: Several years ago, the U.S. sentencing scheme for money laundering was changed in response to similar claims that prosecutors were tacking money laundering charges on to relatively minor offenses and threatening defendants with long sentences if they did not plead guilty to the underlying offense. End Note.) ¶8. (SBU) Comment: Cooperating with Business Solidarity appears to present a good opportunity to promote the rule of law in Russia. The organization seems to have broad support. Its advisory council includes both Lyudmilla Alekseyeva of the Moscow Helsinki Group and Duma Deputy Mikhail Grishankov (from the ruling United Russia party),a former FSB official and now Deputy Chair of the Duma Security Committee. Yakovleva is hoping to participate in the civil society summit and hopes to raise issues related to business protection there. Post recommends urging business community contacts who have been victimized by law enforcement corruption to consider working with her. BEYRLE