Moreover, the court satisfied the Tax Ministry’s appeal to take measures on securing the claim and forbade YUKOS registrars to make any changes in the register concerning operations with securities. Protective measures on the suit of the Tax Ministry against YUKOS are in force until a decision on the nature of the deal is made and the decision comes into effect. Adoption of these measures can be appealed in compliance with legislation. Preliminary hearings on the suit are scheduled for May 7, 2004.

As reported earlier, the Russian Tax Ministry finished auditing the YUKOS tax payment for the year 2000 at the end of 2003. On December 29, 2003 YUKOS was given a notice of tax inspection that stated that revealed tax violations amounted to more than 98bn rubles ($3.43bn) including fines.

The company is charged with deliberate actions aimed at fictitious operations with oil and oil products through specially created organizations registered in Russian regions, republics and cities that provided tax benefits illegally. In particular, YUKOS created and registered organizations in Mordovia, Evenkia, Kalmykia and special administrative districts in the Chelyabinsk, Sverdlovsk and Nizhny Novgorod regions.

At the same time YUKOS press secretary Alexander Shadrin believes that the Tax Ministry’s decision against YUKOS on recovering over 99bn rubles in taxes and fines is not based on Russia’s tax legislation and is of a biased character.

Mr. Shadrin pointed out that the ministry’s decision on the results of a repeated checking of the YUKOS tax payment for the year 2000 was made by Deputy Tax Minister Igor Golikov on April 14, 2004; simultaneously demands were made according to which YUKOS was to pay established tax debts before April 16, 2004.

“The company is going to protect its rights and legal interests by all possible legal means,” the YUKOS press secretary stressed. According to him, the freezing of property of the company is a disproportionate measure to secure claims of the Tax Ministry, since just long-term financial investments of YUKOS, according to information submitted to the Tax Ministry, amount to 480bn rubles (about $16.8bn). “As a rule, arbitration courts decide on such measures of securing a claim that correspond to the amount of claims”, Mr. Shadrin noted.

The YUKOS press secretary also added that the company’s representative had appealed to the European Court of Human Rights in Strasburg with an oral notice that an official appeal against the actions of the Russian Tax Ministry would be submitted next week.