You said that some people enriched themselves through corruption. That means you know who they are and how they did it. File a complaint with the Ministry of Foreign Affairs of the Russian Federation or with the prosecutor’s office. I very much ask you to do this. Because if you said this so confidently, then you know the names; then you know the corruption schemes. And I can assure both you and everyone who will hear, see, or read about our meeting today that the response will be swift, truly immediate, and of course within the framework of the laws currently in force in Russia. Over all these years, and especially in recent years, I have not only spoken about this, but through my actions I have encouraged law enforcement agencies and public organizations to be intolerant of such manifestations. For the state, it is intolerable for a situation to continue in which corrupt officials feel perfectly at ease. Therefore, if you have specific evidence of such conduct, please file a complaint; I would be very grateful to you. Vladimir Putin. Interview with Time magazine. To the Prosecutor General of the Russian Federation Y.Ya. Chaika (125993, GSP-3, Moscow, 15a Bolshaya Dmitrovka St.) Applicant: Alexei Anatolyevich Navalny (XXX, Moscow, Lyublinskaya St., ; mobile phone: (XXXXXXX) STATEMENT regarding a crime (pursuant to Article 141 of the Criminal Procedure Code of the Russian Federation) Dear Yury Yakovlevich, I am a shareholder of OAO Rosneft Oil Company (Appendix 1). According to information published in the Russian mass media and posted on the official website of OAO Rosneft Oil Company (117997, Moscow, 26/1 Sofiyskaya Embankment; official website: http://www.rosneft.ru/), I became aware that the China National Petroleum Corporation (CNPC) transferred US$6 billion to Rosneft as an advance payment for the supply of 48.4 million metric tons of oil by 2010. According to experts cited in the publications, these funds were needed by the company to purchase Yukos assets (primarily Yuganskneftegaz) (Appendices 2–3). In January 2005, OAO Rosneft Oil Company entered into a long-term contract with CNPC through 2010 for export deliveries of crude oil in equal annual quantities totaling 48.4 million metric tons (on Rosneft’s official website: http://www.rosneft.ru/attach/0/57/81/Rosneft_consolidated_FS_2005_RUS.pdf). According to official statistical data from the Federal State Statistics Service (Rosstat), the average export price of oil in 2004 was US$226 per metric ton, or US$30.95 per barrel. In 2007, the average export price rose to US$470 per metric ton, and by the summer of 2008 the price had more than doubled again (Appendix 4). The price of oil under the above contract was set according to the Brent minus 3 formula (about US$40 per barrel at the time). Subsequently, the actual average market price for Urals crude was: in 2005, US$50.40 per barrel; in 2006, US$61.10 per barrel; in 2007, US$69.07 per barrel (1 metric ton = 7.3 barrels). On average, OAO Rosneft Oil Company exports at least 8,066,666 metric tons of oil to China per year, or 58,886,662 barrels. According to the company itself, about 9 million metric tons of oil were exported to China in 2007. As of the first half of 2008, about 30 million metric tons of oil had already been exported to China over the life of the contract. Thus, the company’s annual revenue from oil supplies to China under this contract amounts to: 58,886,662 × $40 = $2,355,466,480 (VAT at 18% = $423,983,966). However, if the price of the oil supplies had been calculated in accordance with the law, based on actual market prices (Article 40 of the Tax Code of the Russian Federation), then: in 2005, sales revenue would have been 58,886,662 barrels × $50.40 = $2,967,887,765, with lost income in this case amounting to $612,421,285, and the VAT difference: $110,235,832; in 2006, sales revenue would have been 58,886,662 barrels × $61.10 = $3,597,975,048, with lost income in this case amounting to $1,242,508,568, and the VAT difference: $223,651,542; in 2007, sales revenue would have been 58,886,662 barrels × $69.07 = $4,067,301,744, with lost income in this case amounting to $1,711,835,264, and the VAT difference: $308,130,348. Total losses: $3,566,765,117 (approximately US$3.5 billion over 3 years), of which VAT accounts for $642,017,772. As we can see,** despite such a significant rise in oil prices in recent years, OAO Rosneft Oil Company continues to supply oil to China at 2004 prices, causing enormous financial damage both to the company’s shareholders (including me personally) and to the state as a whole in the form of substantial lost tax revenue. I believe that the lost income (namely, the difference between the market price of oil and the contract price) is ending up in accounts at foreign banks and is not being repatriated to the Russian Federation. Thus, OAO Rosneft Oil Company has substantially understated its taxable base by understating the export price under the contract. I believe that the above actions of the officials of OAO Rosneft Oil Company in concluding and subsequently performing the contract with the China National Petroleum Corporation (CNPC) contain elements of crimes falling under the following articles of the Criminal Code of the Russian Federation: Article 165 of the Criminal Code, “Causing property damage through abuse of trust”; Article 193 of the Criminal Code, “Failure to repatriate foreign currency funds from abroad”; Article 194 of the Criminal Code, “Evasion of customs payments levied on an organization or individual”; Article 199 of the Criminal Code, “Evasion of taxes and/or fees by an organization”; and Article 201 of the Criminal Code, “Abuse of authority” (in this case, by persons performing managerial functions in this commercial organization). At the same time, I **would like to draw special attention to the fact that the above actions of the officials of OAO Rosneft Oil Company not only fall under Article 165 of the Criminal Code, “Causing property damage through abuse of trust,” with respect to me, but also unquestionably infringe my constitutional rights and freedoms, since under Part 1 of Article 34 of the Constitution of the Russian Federation I have the right to freely use my property (including my funds) for entrepreneurial and other economic activity not prohibited by law (in particular, for investing funds in the share capital of open joint-stock companies and receiving the proper income in the form of share dividends). Thus, the above actions of the officials of OAO Rosneft Oil Company not only cause me property damage (as well as damage to the state as a whole in the form of unpaid taxes and other payments), but also infringe my constitutional rights to use my property for the purpose of deriving proper profit from shares in an open joint-stock company. It should also be noted that the largest shareholder of OAO Rosneft Oil Company is the state (about 75% of the shares), which also suffers significant losses as a shareholder. I consider the **damage caused to me to be substantial, and I regard the damage to the state as having been caused on an especially large scale. In view of **the foregoing, and on the basis of Paragraph 4 of Article 10 of the Federal Law “On the Prosecutor’s Office of the Russian Federation” and Articles 141, 144–146 of the Criminal Procedure Code of the Russian Federation, I REQUEST that a prosecutorial review be conducted into the facts indicating signs of a number of crimes in the actions of the management and officials of OAO Rosneft Oil Company in concluding and performing the oil supply contract with the China National Petroleum Corporation (CNPC), that the guilty persons be identified and brought to criminal liability under Articles 165, 193, 194, 199, and 201 of the Criminal Code of the Russian Federation—or, alternatively, that a reasoned decision refusing to initiate a criminal case be issued so that it may be appealed further if necessary. I request that the unlawful activity involved in performing this contract be stopped immediately, since it remains in force until 2010 and over the remaining period will cause even greater damage both to shareholders and to the interests of the state. In view of the particular importance and significance of this matter for the interests of the Russian Federation, I request that it be placed under the special supervision of the Prosecutor General of the Russian Federation. I am aware of criminal liability under Article 306 of the Criminal Code of the Russian Federation for knowingly making a false report. Appendices: Statement from the DEPO account of the Troika Dialog depository company. Copy of an article from Nezavisimaya Gazeta dated July 3, 2008. Copy of an article from the Rosbalt news agency dated November 26, 2007. Printout of data on average export prices for major goods from the official website of the Federal State Statistics Service (Rosstat). Applicant A.A. Navalny October 24, 2008 P.S. I would*** like to draw the esteemed public’s attention to the fact that Rosneft has now received state support in the amount of $4.2 billion. So, they’ve already fed away $3 billion on the Chinese contract alone, they’ll f away almost that much again, yet they still saw fit to take $4.2 billion from taxpayers “to live on.” Interesting business, isn’t it?***