The Washington Post: ‘Raiding’ Underlines Russian Legal Dysfunction

August 13, 2009

3 Lawyers Targeted After Uncovering Seizure of Firms

Philip P. Pan

When three of Russia’s finest lawyers agreed to represent the investment fund Hermitage Capital, they thought they were taking on a routine tax case.

Then they uncovered evidence of a breathtaking crime: Top police and tax authority officials appeared to have quietly seized ownership of Hermitage firms and used them to arrange a $230 million tax refund.

Now, the lawyers themselves are in legal trouble. One has been jailed. The two others have fled the country. All three face charges that seem intended to discredit Hermitage and divert attention from the enormous theft.

Their plight highlights the hazards of practicing law in Russia’s corruption-ridden courts despite nearly two decades of reforms supported by hundreds of millions in U.S. and European aid. Prosecutors and police continue to dominate the judiciary as they did in the Soviet era, but unrestrained by the institutions of the old Communist system or the checks of a genuine democracy, the opportunities for abuse have grown.

No crime illustrates the state of the legal system better than what is known as “reiderstvo,” or raiding — the takeover of businesses through court rulings and other ostensibly legal means with the help of crooked judges or police. The practice is so widespread that local media have reported what raiders charge: $10,000 to alter a corporate registry, $50,000 to open a criminal case, $300,000 for a court order.

Hermitage, once Russia’s largest foreign shareholder with more than $4 billion in holdings, says it encountered a bold variation on reiderstvo: When raiders failed to seize its assets, they looted the Russian treasury instead, then went after the lawyers who caught them.

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The Washington Post: Рейдерство подчеркивает дисфункциональность судебной системы в России

August 13, 2009

Перевод статьи ‘Raiding’ Underlines Russian Legal Dysfunction , обубликованной в The Washington Post.

Филип П.Пэн

Три российских юриста подверглись гонениям после того, как выявили рейдерский захват нескольких фирм, пишет Washington Post. Высокопоставленные сотрудники милиции и налоговой службы, по-видимому, тайно захватили несколько фирм, принадлежащих инвестиционному фонду Hermitage Capital, и через эти фирмы устроили возмещение ранее внесенных в казну налогов, составившее 230 млн долларов, пишет корреспондент Филип П.Пэн. По его мнению, факты рейдерства подчеркивают дисфункциональность российской судебной системы.

Российские власти предъявили всем трем юристам обвинения, которые, по мнению издания, призваны дискредитировать Hermitage и отвлечь внимание от крупномасштабного хищения, описанного выше. Один из юристов находится под стражей, остальные бежали за границу. “В заявлении, сделанном в июле, МВД хвалится своим успешным расследованием аферы с возмещением налогов. Но деньги не возвращены и ни один чиновник не арестован. Прокуратура предъявила обвинения только некоему гражданину, ранее осужденному за убийство, который по документам числится новым владельцем фирм Hermitage”, – пишет газета.

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Politically-motivated abuses of the criminal justice system

August 7, 2009

Excerpts from the report, published by the Committee on Legal Affairs and Human Rights on allegations of politically-motivated abuses of the criminal justice system in Council of Europe member states with recommendations on series of steps to strengthen the independence of judges and prosecutors across Europe to end politically-motivated interference in individual cases.

Inter alia the Committee calls for a series of reforms to reduce the political and hierarchical pressures on judges and put an end to the harassment of defence lawyers in order to combat “legal nihilism” in the Russian Federation, as a precondition also for successful co-operation between Russian and other European law enforcement authorities.

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Declaration by the lawyer Neil Micklethwaite

August 6, 2009

Declaration by the lawyer Neil Micklethwaite filed in the Southern District Court of New York supporting a foreign discovery claim on behalf of the plaintiffs. This is a public legal filing containing allegations which have not yet been ruled on in a court of law.


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