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Robert Amsterdam Interview in Libero Mercato

On Sept. 13, 2007, the Italian business paper Libero Mercato published a profile interview with Robert Amsterdam. Below is a rush translation – a full original PDF copy can be downloaded here in Italian. LiberoMercato0921.jpg THE LIBERO MERCATO INTERVIEW: ROBERT AMSTERDAM Kazakhstan and the Khodorkovsky Theory: “The Freeze on Eni is a message from Putin” According to the lawyer for Mikhail Khodorkovsky, the former head of Yukos incarcerated by Moscow, the crisis in Kazakhstan is just a taste of what could happen to the Italians in Russia. Sixteen years after the collapse of the Soviet Union, its borders are still obscured by the haze of oil and gas deposits. And anyone venturing forth to do business in these areas can end up purchasing assets in the dark, without knowing exactly what it may mean in the future to be “related” to certain former Soviet families. This matter has been carefully studied by Robert Amsterdam, counsel to Mikhail Kordorkovsky, the former president of the Yukos oil company who has been sentenced to serve years in a Russian prison, despite many court rulings in his favor, including the European Court of Human Rights. In his view, the Kazakhstan energy dispute is just another stage for this drama to play out, involving the leading players President Vladimir Putin, the Managing Director of Eni, Paolo Scaroni and the President of Italy Romano Prodi. At stake is the crisis in relations between Italy and Kazakhstan due to alleged environmental violations at the Kashagan oil field. Robert Amsterdam sums it up thus for Libero Mercato: “He who lives by the sword, dies by the sword. Eni took part in the undemocratic carve up of Yukos assets and have gained a strong advantage, but conditions can change without warning.What is your opinion on the events at the Kashagan field and the alleged environmental violations on Eni’s behalf? “Right now this Italian company is very important for the Kazahk premier Karim Karimovich Masimov. Eni provides technology and know-how that are indispensable for the large Kashagan field, and as long as things stay that way, they will be able to stand firm in the country. Likewise, the Kazakhs are following an environmental and expropriation policy to support the very companies operating in their territory. Above all, Eni. But this is a transitional phase. Kazakhstan uses the same methods as Moscow. When a partner is no longer useful, they are discharged and expelled.” How will this dispute be settled? “Right now everything has been pushed back until the end of October. The Italian premier will visit Astana for negotiations. But he will still find an extremely complex situation. I believe that for Prodi and Scaroni to understand how it will work out, they will need to look in the mirror. They will be remined of what they did in the Yukos auction hall, and how they participated in dismembering the empire than Khodorkovsky has built up. What is happening now in Kazakhstan is only an appetizer – the first “dividend” that Prodi can collect. In other words, a warning from Putin: what happened to Yukos, is happening to Russneft. Do not doubt that in the future it cannot happen to others. Perhaps even to you Italians” You say the same thing could also happen in Russia? “Absolutely. As the the Moscow Times columinst Yulia Latynia wrote yesterday, the expropriation of many companies in Russia is going ahead very rapidly. The battle being fought over Russneft assets is not only of a commercial type. Vladimir Putin is distributing property to the state corporations held by his allies, just as Catherine the Great used to do with landholdings. As soon as the management of these state-held companies attain a sufficient level of technical know-how, there will no longer be any room for foreigners or old partners in the new “Soviet Empire”. The elections held last September 7 seem to have given President Vladimir Putin absolute control of the Duma. Meanwhile in Moscow wagers have opened on who the successor will be, and with Putin dealing, there are new rules to the game. He has brought a threesome to the forefront in a recent cabinet shuffle: Sergei Ivanov, the former defense minister who was promoted to first deputy prime minister, Sergei Naryshkin, who was made deputy prime minister, and Anatoliy Serdyukov, a former taxman was moved to the highest military post. What do you think will happen next year? “Firstly, it needs to be remembered that Russia is not a democracy. Furthermore the situation has become less and less transparent with respect to regulation and risk assessment, posing major difficulties to foreign investors. Italy, under the Prodi government, is actively supporting this anti-democratic system without, however, getting anything in return. Despite this, Italy thinks that Russia will always be in this position to the European market, so they will voluntarily provoke energy crises to benefit their own pockets.” There are however other western countries also doing business with Putin? “Certainly. In fact, a heavy attack on democracy and corporate governance rules is taking place widely across Europe. Take Hungary for example, whose government has made use of the delays in the European Project to smother the “Nabucco” gas pipeline, promoted by Brussels, and to favour the opposing “Blue Stream” project, thus for intents and purposes, becoming a base for Gazprom. Australia too is also selling huge amounts of uranium to the Russians without understanding that the final use may not only be for energy production, but also military use. If you have energy and arms you can take advantage of instability, or even bring it about.” How do you see as your client’s future in light of the Swiss Federal Tribunal and the European Court of Human Rights rulings in his favour? These rulings prove that Moscow’s legal system is a farce. Even the Russians are beginning to grasp this because the false accusations of tax evasion, unsupported by any evidence against my client, is always the worst kind of visiting card. I’m afraid however that it may be too late for a solution, and personally I fear for Kodorkovsky’s safety.