VZCZCXRO4736
RR RUEHAG RUEHAST RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA RUEHLN
RUEHLZ RUEHPOD RUEHROV RUEHSR RUEHVK RUEHYG
DE RUEHMO #2477/01 2331220
ZNR UUUUU ZZH
R 201220Z AUG 08
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC 9583
RHMFIUU/DEPT OF JUSTICE WASHINGTON DC
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE

UNCLAS SECTION 01 OF 02 MOSCOW 002477 
 
STATE FOR EUR/RUS 
 
DOJ FOR OPDAT/LEHMANN, NEWCOMBE AND ALEXANDRE, OIA FOR BURKE, OCRS 
FOR OHR AND OTT 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV PHUM PREL RS KCRM KJUS SNAR
SUBJECT: BUSINESSWOMAN VS CORRUPT DRUG AGENTS 
 
THIS CABLE IS SENSITIVE BUT UNCLASSIFIED, NOT FOR INTERNET 
DISTRIBUTION 
 
¶1. (SBU) Summary:  Post Resident Legal Advisor (RLA) recently met 
with Yana Yakovleva, financial director of Sofeks Chemical Company. 
Yakovleva and her business partner were the subjects of an extortion 
attempt by the Federal Service for Narcotics Control (FSKN).  When 
they refused, they were charged with distributing diethyl ether (not 
a crime under Russian law) and held in jail for seven months.  They 
were finally released when prosecutors were forced to concede that 
they had not committed any crime.  Upon release, Yakovleva formed 
Business Solidarity, an alliance of approximately 100 Russian 
businesses dedicated to fighting official corruption and extortion 
of businesses.     Her case provides fascinating insight into how 
law enforcement extorts businesses and how businesses are trying to 
protect themselves. It also provides an opportunity for USG to 
support a civic initiative against corruption. End Summary. 
 
------------------------ 
THE CASE OF THE CHEMISTS 
------------------------ 
 
¶2. (SBU) Yakovleva explained that she started Sofeks in Moscow in 
the early 1990Qs, after graduating from college.  SofeksQ main 
business was the importation and re-sale of chemical solvents.  For 
years it operated successfully, without any problems.  But in 2004, 
Yakovleva and her partner Aleksei Protskii were approached by FSKN 
agents, who proposed partnering in a scheme where FSKN would provide 
the protection in return for splitting the profits.  At first, 
Yakovleva thought it was a joke, but quickly realized that it was a 
crude attempt to extort Sofeks and dismissed the agents. 
 
¶3. (SBU) Shortly thereafter, the agents officially opened a criminal 
case against Yakovleva and Protskii for illegal distribution of 
diethyl ether, a chemical solvent which Sofeks purchased from a 
French producer and re-sold to various Russian purchasers.  In July 
2006, Yakovleva and Protskii were charged under Article 234 of the 
Russian Criminal Code, which criminalizes trafficking in so-called 
virulent (silnodyestvuyushchiye) substances.  Because Article 234 
does not define the word virulent or designate the substances to be 
considered Qvirulent,Q it is an open invitation to abuse.  In 
charging Protskii and Yakovleva, the FSKN relied on a list which was 
prepared by an unofficial organization called the Standing Committee 
on Narcotics Control which, it was later determined, did not even 
have the legal authority to classify virulent substances. (In June 
2006, the Russian Supreme Court issued a ruling holding Article 234 
unconstitutional given the absence of any legal definition of the 
term virulent.  This ruling, however, did not stop application of 
the law.  In 2006, over 1,000 people were convicted under Article 
234 and in the first six months of 2007, over 600 were convicted.) 
 
 
¶4. (SBU) Upon being charged, Yakovleva and Protskii were arrested 
and denied bail.  During court hearings, which began in October 
2006, their lawyer presented evidence that FSKN forensic analysis 
had been fabricated and argued that, in the light of the wording of 
Article 234 and the Supreme CourtQs June 2006 decision, distribution 
of diethyl ether was not a crime.  At the same time, The case, which 
became popularly known as the Case of the Chemists (Dyelo Khimikov) 
became a cause celebre.  YakovlevaQs and ProtskiiQs supporters 
mounted an aggressive public relations campaign, which included 
calls for their release by several Duma deputies, Human Rights 
Ombudsman Lukin, the Moscow Helsinki Group, and approximately 100 
other chemical companies.  In February 2007, the Perovskii District 
Court returned the case to prosecutors to correct what the court 
termed errors in the indictment.  Prosecutors then decided to drop 
the case. 
 
¶5. (SBU) After her release, Yakovleva continued to fight against 
abuse of Article 234.  As a result of her agitation, in April 2007, 
the Public Chamber reviewed the Sofeks case, called on the Moscow 
City ProsecutorQs Office to pursue a criminal investigation of the 
FSKN agents responsible for it, and also called for repeal of 
Article 234.  In August 2007, in response to a request by Sofeks 
lawyer, the Ministry of Health and Social Development issued a 
statement confirming that the Standing Committee on Narcotics 
Control is not legally authorized to designate substances as 
QvirulentQ under Article 234.  In November 2007, the Duma formally 
amended Article 234 to require that lists of virulent substances be 
officially approved by the Russian government before they can obtain 
the force of law. (Despite this amendment, the law still does not 
provide a definition of virulent.  Nor does it specify by what 
criteria the list should be compiled.  In December 2007, the 
government refused to approve a draft list prepared by the FSKN and, 
as far as we are aware, no legally binding list exists.) 
 
 
MOSCOW 00002477  002 OF 002 
 
 
¶6. (SBU) In September 2007, Yakovleva started Business Solidarity, 
an NGO dedicated to protecting businesses against abuse by law 
enforcement. It purports to represent 91 businesses committed to 
protecting each member business from illegal attack.  In June, 
Business Solidarity presented President Medvedev with a proposed 
anti-corruption program. The main provision of the proposal is a 
moratorium on pre-trial detention in cases involving non-violent 
crimes where other means of pre-trial restraint, such as bail, are 
available.  Yakovleva explained that this is a priority because the 
threat of detention is the main means by which law enforcement 
extorts business.  Even if a criminal case is clearly fabricated and 
falls apart in court, she said,  the simple fact of being held for 
several months pending trial can easily destroy a personQs business. 
 In order to ensure that a subject will be detained, Yakovleva said, 
investigators often deliberately send a notice to appear for an 
investigative interview to the wrong address.  When the subject 
fails to appear, he is declared a fugitive, which provides a strong 
basis for detention when he is finally Qcaptured. 
 
¶7. (SBU) Other planks of the proposed anti-corruption program 
include a moratorium on supervisory inspections (proverki) of small 
and medium sized businesses; a zero tax for start up businesses; 
reduction in the number of government inspectors; salary increases 
for government inspectors; regular public hearings at which 
businesses can express their concerns about government regulation; 
expert review of existing regulatory and criminal legislation and 
development of a federal law on the defense of entrepreneurs.  In 
addition to these proposals, the organization has also created a 
website, himdelo.com, with an electronic hotline where entrepreneurs 
can report abuse and extortion by law enforcement. 
 
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COMMENT 
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¶8. (SBU) Initiatives like Business Solidarity provide an ideal 
opportunity for USG to support the rule of law and combat 
corruption. In order to help her formulate proposals on reform of 
pre-trial detention, RLA provided Yakovleva with relevant US 
legislation and judicial decisions. We will continue to explore 
other ways to support this and similar campaigns. 
 
BEYRLE