U.S. concerned Russia to freeze assets, prosecution seen as ‘rule of law’ issue

Barry Schweid

Associated Press diplomatic writer

The Bush administration expressed concern Oct. 31 about the freezing of a huge chunk of shares in the giant Russian oil company Yukos by prosecutors in Russia.

The action “has indeed raised serious questions about the rule of law in Russia” and sparked concerns among domestic and international investors about respect for ownership rights, State Department spokesman Richard Boucher said.

He said U.S. investment would continue, but added that Russian authorities need to dispel worries that the case is politically motivated.

“They need to ensure that’s judged fairly and with full regard for due process of law applied in a non-selective fashion,” Boucher said.

It was the second consecutive day of public criticism by the Bush administration.

On Oct. 30, the State Department expressed concern about the arrest and jailing of the head of Yukos.

There was no direct criticism of Russian President Vladimir Putin, whose top lieutenants apparently were behind the Oct. 25 arrest of Mikhail Khodorkovsky, but there was concern about the impact on the fragile democracy in the former communist state.

“There’s always the issue we see (in) a case like this as to whether it’s a single event or whether it has some sweeping implication for the rule of law in Russia,” Boucher said. ``And that’s what investors are watching closely, that’s what markets are watching closely, and ultimately each investor will have to decide what he thinks the climate will be.”

President Bush has struck a strong friendship with Putin, whose sympathetic telephone call soon after the Sept. 11, 2001, terror attacks in New York and Washington raised Bush’s spirits.

Bush has promoted recognition of Russia as a democracy and its acceptance by the European allies.