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Financial Monitoring Service chief Viktor Zubkov (left) has managed to jump higher than First Deputy Prime Minister Sergey Ivanov (right) thanks to experience that comes with the age.
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Capital Discypriotization
Neither Russia Nor Georgia Granted Amnesty
The Only Disastrous Decision
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A Lot to Talk About with Somebody
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Sep. 13, 2007
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Who is Mr. Zubkov?
Russian President Vladimir Putin has nominated Viktor Zubkov, head of the Financial Monitoring Service, to replace Prime Minister Mikhail Fradkov who resigned on Wednesday along with his government. The parliament is expected to endorse his candidacy on Friday. Mr. Zubkov, who turns 66 on Saturday, is the oldest official among all ministers and directors of federal agencies and services. A man from the president’s entourage, he can add an anti-corruption campaign to the background of parliamentary and presidential elections and even become a one-term placeholder before the return of Vladimir Putin in the 2012 presidential election.
Kommersant reported on March 21 that Viktor Zubkov was retiring from the Federal Financial Monitoring Service. Several days later, the United Russia endorsed a proposal of Omsk deputies to put him forward to the Federation Council from Omsk Region. Viktor Zubkov turned 65 on September 12, 2006, which is the age limit for state service, according to the law on State Civil Service. Sending the financial regulator to the Federation Council looked as the most honorable way of dismissal. However, Mr. Zubkov was not eligible to represent Omsk Region after a bill had been passed to allow people to seek Senator seats only in regions where they have lived at least ten years. Viktor Zubkov has never lived in southwest Siberia. In August, media discussed his possible appointment to the Federation Council from Leningrad Region. The financial crime investigator said he was leaving his post but added that he would be “not far from the financial sector.”

The Financial Monitoring Service has hardly become known for anything outstanding since its creation apart from tensions with the Central Bank over control over banking transactions.

Kommersant contacted several officials and businessmen to comment on the president’s nomination, but none of them said anything negative or at least specific about Viktor Zubkov. Sergey Shokhin, first deputy chief of the Federal Customs Service who was in charge for banking at the Audit Chamber in 2001-2005 and had close links to the Financial Monitoring Service, described Mr. Zubkov as “a true professional and a great person to work with.” Garegin Tosunyan, president of the Association of Russian Banks said the former financial investigator is “a highly education person.” Finance Minister Alexey Kudrin gave a comment in the same vein.

From 1992 to 1993, Viktor Zubkov served as deputy chairman of St. Petersburg’s committee on external relations where Vladimir Putin was chairman. After that he began working his way up in the Russian bureaucracy along with incumbent Defense Minister and former tax service chief Anatoly Serdykov, Mr. Zubkov’s son-in-law. Mr. Zubkov also has an immaculate political record. In 2000, he headed St. Petersburg’s office of Unity which later merged into United Russia. In 1999, he ran for governor of Leningrad Region and his campaign was run by then little-known Boris Gryzlov, now the Duma’s speaker.

Viktor Zubkov’s nomination may resemble the surprise appointment of Mikhail Fradkov as prime minister in 2004. Both men were low-key politicians and were never named as likely candidates to head the government. But unlike his predecessor, Mr. Zubkov may become a “political” rather than a “technical” premier, a label that Mr. Fradkov has had for the past four years.

Viktor Zubkov as prime minister may bring disappointment to officials and businessmen. It was him who suggested in June 2004 that President Putin sanction “monitoring of accounts of people with significant public powers.” He suggested controlling bank accounts of politicians, their families and business partners. Mr. Zubkov urged for the right to freeze bank accounts of any company suspected of money laundering without trial for up to 45 days. Under Russian law, a bank account can be kept frozen only following a court sanction up to five days. “I’m sure that no one would turn up to pick up 90 percent of the frozen money, and we could send it to the budget,” Viktor Zubkov said commenting his initiative.

Fighting corruption will apparently become one of the highlights in Prime Minister Viktor Zubkov’s activities. He is one of few high-ranking officials in Russia who have all possible information about financial operations, bank accounts and money transactions of businessmen and officials. In any case, a campaign to eradicate corruption among officials may be a perfect tool to foil any attempts of elites in power to deviate from earlier assigned roles in the upcoming elections.

An anti-corruption campaign could become a decent issue for any person seeking to succeed Vladimir Putin, comparable to the Chechnya issue where the incumbent president made his political capital. Therefore Vladimir Zubkov could be considered not only a new prime minister but also as a real candidate for Russian presidency. Unlike other presidential hopefuls Sergey Ivanov or Dmitry Medvedev, Mr. Zubkov is not likely to want to run for the second term in 2012. What is more, no one would be surprised if 66-year-old President Viktor Zubkov steps down citing health reasons.

   &
Direct Speech

Viktor Zubkov’s Political Credo

On President Putin

“Is there an alternative to our president? There’s none now. So, we should try hard to help him.” At a session of the Valdai discussion club, September 2004

On income tax

“The introduction of the flat income tax rate is a temporary step. We must not equalize those with the annual income of 30,000 rubles and those who earn ten times as much. It’s not fair. We undoubtedly need to introduce two rates – the bottom one (12 to 13 percent) and the top one (about 20 percent).” A news conference, August 2000

On claims against foreign banks

“We have claims against banks which are headquartered outside Russia and have correspondent accounts in several banks down here. With the help of our counterparts from the countries whose banks have accounts in Russia we are carefully considering financial information that we find suspicious. And we find it suspicious in terms of money laundering.” An interview with the NTV television, October 6, 2005

On amnesty of capital

“We could probably discuss some kind of amnesty for people because not all money is criminal. Perhaps people moved their money there because of loopholes in law. Maybe with some conditions – like paying a tax – we could let this money be reinvested in some sort of production.” An interview with the Ekho Moskvy radio, January 22, 2003

On ways to tackle the financial crisis

“Several shops raised prices on imported electronic goods. We have recorded these cases and warned directors that we are going to come and check all their papers for the past three years and eight months.” August 19, 1998

On ways to solve the Chechnya issue

“This use of force will kill all our people. I believe that we must consider the question [on Chechnya’s secession], make the real border and then deal with other problems.” At TV debates, September 9, 1999

On migrants

“Some 17 million people come from Asia and Africa to Russia every year. This is the breeding ground for different kinds of murky dealings which make money which goes on to finance such things as international terrorism.” At a meeting, February 10, 2004

On ready money

“What is ready money? This is the money that is taken to an unknown direction but we know what for – to bribe officials and criminals.” An interview with the Rossiiskaya Gazeta daily, October 20, 2006



Profile

Viktor Alexeevich Zubkov

Viktor Zubkov was born on September 15, 1941 in the village of Arbat, Sverdlovsk Region in the southern Urals. From 1958 to 1960, he worked as a fitter in the Monchegorsky repair and engineering works in Murmansk Region. In 1965, he graduated from Leningrad Agriculture Institute in economics. After military service he went to work on collective farms in Leningrad region in 1967. He served as a department director and deputy director at the Krasnaya Slavyanka farm, director at Razdolye and director general at the Pervomaiskoye farm union. In 1985, he took over the regional administration of the Priozersky district in Leningrad Region and later served as first secretary of the city committee of the Communist Party and chief of the agriculture and food industry department in the Leningrad regional party’s committee. From 1989 to 1991, he worked as first deputy chairman of the Leningrad Regional Executive Committee of the Communist Party while future Russian Deputy Prime Minister Yuri Yarov was the chairman.

From January 1992 to November 1993, he worked in the foreign economic department of St. Petersburg administration as deputy to its chairman Vladimir Putin. Media reported that he helped Vladimir Putin and some of his friends to buy small land plots in Priozersky district outside St. Petersburg where the Ozero dacha development was founded. In November 1993, Viktor Zubkov was appointed deputy director of the Federal Tax Service and chief tax inspector for St. Petersburg. From July 1999 to November 2001, he was Deputy Tax Minister and head of the ministry’s tax service for St. Petersburg and Leningrad Region. He unsuccessfully tried to win election as governor of Leningrad region in 1999. Boris Gryzlov headed his election campaign. Viktor Zubkov came in fourth, mustering 8.64 percent of the vote.

In November 2001, he was appointed First Deputy Finance Minister and head of the financial monitoring committee at the Finance Ministry. Mr. Zubkov headed the Federal Financial Monitoring Service on March 16, 2004 following the government shakeup. During his tenure Russia was taken out from the black list of the Financial Action Task Force on Money Laundering. The financial regulation managed to secure more powers for his agency and assumed control over banks as well as casinos, pension funds and pawn-shops. Mr. Zubkov said in May 2004 that several Russian could soon lose their licenses, which came as a reason for a crisis on the interbank credit market.

Viktor Zubkov holds PhD in economics and is an Honored Economist of Russia. His thesis is called Streamlining taxation on mineral and raw materials complex in the example of Leningrad Region. He holds orders of The Badge of Honor, The Red Banner of Labor, For Service to the Homeland (2nd Class). His daughter, Yulia, is married to Defense Minister Anatoly Serdyukov.


Dmitry Butrin, Pyotr Netreba, Vadim Visloguzov and Arina Sharipova

All the Article in Russian as of Sep. 13, 2007

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