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White House Comments on Yukos Controvery


The Bush administration is weighing in on the controversy surrounding the huge Russian oil company Yukos. Some of the company's assets were seized by the Kremlin after a court found it owed tens of billions in back taxes. On Sunday, a big chunk was auctioned off to a virtually unknown company.

White House officials leave no doubt they are very concerned about the fate of the giant Russian oil company.

Spokesman Scott McClellan says the forced auction was a disappointment.

"We had hoped for a solution that would allow for the legitimate enforcement of tax laws, but avoid harming foreign investors, especially American investors," said Mr. McClellan.

Mr. McClellan says the Bush administration has warned the Kremlin on numerous occasions that its handling of the Yukos matter could have, in his words, a "chilling effect" on investment in Russia.

"We continue to believe it is Russia's responsibility to seek greater integration in the world economy, to create an environment governed by the protection of property rights and the rule of law, and to restore confidence in its political, legal and judicial institutions," he added.

During a session with reporters, Mr. McClellan stressed that if Russia wants to lure investment it must create a stable environment for investors. He was asked if the issue will be on the table when President Bush and Russian President Vladimir Putin meet in Slovakia on February 24.

The White House spokesman said it is too early to say what will be on the agenda. He said there will be a great deal to discuss, and referred to comments made Monday by President Bush at an end-of-year news conference.

"We have a very good relationship, as the president talked about yesterday," he noted. "It is a relationship where we can talk about our efforts to work together on shared priorities like the war on terrorism, as well as talk about differences that we may have in a very open way."

President Putin has deflected criticism of the Yukos controversy, saying the forced auction was proper under Russian law. But the fate of the giant oil company has raised questions in some quarters about the political motives behind the legal campaign against the company and the jailing of its former top executive.

Critics note the former head of the company, who is being tried on tax evasion and fraud charges, supported Mr. Putin's political opponents.

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