Russia announces spy arrests after BP raids: report

British Petroleum & British Council accused of spying:

Russia's secret service has charged two Russian-Americans with industrial espionage, the service was quoted as saying Thursday, a day after raids on the offices of British oil major BP in Moscow. The two men "were illegally collecting secret commercial information for a number of foreign oil and gas companies with the aim of gaining concrete advantages against Russian competitors," said a statement from the FSB secret service, Russian news agencies reported. Industrial espionage is punishable in Russia by up to two years in prison. The men arrested were an employee of British-Russian oil company TNK-BP and his brother, who is the head of the British Alumni Club, an association supported by the British embassy in Moscow, Russian news agencies reported, citing the FSB statement. The statement said the surname of the two brothers was Zaslavsky. A British embassy spokesman named the British Alumni Club president as Alexander Zaslavsky. Sources in the British university graduate community in Moscow who requested anonymity named the other suspect as Ilya Zaslavsky. Both were believed to be graduates of Oxford University, the sources said. Russian news agencies said the two held both Russian and US citizenship. "We have seen the press reports. However as a matter of policy we don't comment on consular matters of a legal nature," said a US embassy spokesman. The FSB security service could not immediately be reached for comment, but in London, the British Council -- which promotes British education and culture overseas -- expressed concern.

"Mr Zaslavsky and his brother are both members of the British Alumni club, for Russian nationals who have studied in the United Kingdom," it said, adding that as such they valued contact with the British Council. It stressed, however, than neither man was a member of the British Council, which in January was forced to suspend its work in Saint Petersburg after Russian authorities alleged irregularities in its status. News of the arrests came after raids on Wednesday by security officers on BP and its Russian joint venture TNK-BP, which was set up in 2003 and is now Russia's third largest oil company. TNK-BP is jointly owned by BP and a group of Russian investors. It has faced growing pressure in Russia, where the state has reasserted control in the lucrative oil and gas industries. "TNK-BP is a Russian company. We operate on Russian soil and we operate always within the framework of Russian legislation," said a company statement read to AFP over the telephone by a spokeswoman. "We have never countenanced or supported any actions which try and counter Russian legislation or fair business practice," the statement continued. A spokesman for the British embassy said: "We're monitoring the situation and we're in contact with BP." The two men were arrested on March 12 while attempting to receive classified information from a Russian citizen who was an employee at a closed facility in Russia's oil and gas sector, the FSB statement was quoted as saying.

They were charged with espionage on Tuesday and the next day raids were conducted on BP and TNK-BP in connection with the criminal investigation opened into their case by the secret service, the statement said. "During the raids, material proof confirming the industrial espionage was found and confiscated" including classified official documents and "business cards of employees of foreign military agencies and the CIA," it continued. Russian newspapers said Wednesday's raids on BP and TNK-BP could be part of a wider effort to force a sale of part of the joint venture, a potential deal which has been rumoured for months. The Kommersant daily cited sources within TNK-BP saying that the raids could be aimed at reducing the share price so that part of the company could be sold off more cheaply to state-run gas monopoly Gazprom. Gazprom has denied rumours that it wants to buy a stake in TNK-BP. TNK-BP has already been the subject of inquiries by the FSB for alleged breaches of Russian legislation on state secrets, which forbids foreigners from accessing information about Russia's energy reserves. Last year, TNK-BP sold Gazprom a majority stake in the vast Kovykta gas field in Siberia at a heavily discounted price after coming under pressure from Russian officials for alleged breach of contract.


Brothers face Russia spy charges

Russian security officials say they have arrested and charged two brothers with links to British interests. Ilya Zaslavsky is a manager at the TNK-BP oil joint venture, his brother Alexander head of the British Council's Moscow Alumni club. The two, who have joint US and Russian citizenship, were gathering classified data for foreign firms, the FSB said. The arrests are the latest in a series of incidents which has caused serious frictions between Russia and the UK. British Council work was curtailed last year in a row over the death of ex-security agent Alexander Litvinenko.

'Material proof'

The Moscow offices of the British oil giant were raided by the authorities on Wednesday. Russia's security agency, the FSB, has confirmed that the raids were related to the Zaslavsky case. "During the raid, material proof confirming the industrial espionage was found and confiscated," it said in a statement. This included business cards of foreign military agencies and the CIA, it said. But analysts say the objective of the authorities is much broader than prosecuting a case of industrial espionage, as they attempt to re-assert control over an oil industry, much of which was sold off to foreign investors in the 1990s. The BBC's Rupert Wingfield-Hayes in Moscow says TNK-BP, which is the UK's largest joint venture in Russia and Russia's third-largest oil company, is the last in the industry still beyond the Kremlin's control, but perhaps for not much longer. Last year state gas giant Gazprom bought a majority stake in the vast Kovykta field from TNK-BP, and is rumoured to be now seeking to buy a stake in the joint venture itself. The row is the latest development in ongoing tensions between London and Moscow that began with the murder of Mr Litvinenko, a former KGB agent, in London in November 2006. The UK wants Russia to hand over businessman Andrei Lugovoi, whom UK investigators suspect of murdering Mr Litvinenko - he died after being given a fatal dose of radioactive polonium 210. Russia refused to extradite Mr Lugovoi, now a member of the Russian parliament, so Britain expelled four Russian diplomats - Moscow then expelled four British diplomats.


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