December 30, 2010 / 4:43 PM / 7 years ago

UPDATE 4-Harsh US words for Russia, but little impact on ties

* US official says sentence could hurt Russia at WTO

* State Dept calls it an “abusive use of the legal system”

* But not seen hindering US-Russian relations (Updates with analyst comment, Jackson-Vanik background)

By Arshad Mohammed and Ross Colvin

WASHINGTON, Dec 30 (Reuters) - The United States suggested on Thursday that an extended prison term for Russian former tycoon Mikhail Khodorkovsky was an abuse of justice, and a senior U.S. official said it may impede Russia’s entry to the World Trade Organization.

Despite the harsh U.S. words, analysts said the treatment of Khodorkovsky and his co-defendant, Platon Lebedev, was unlikely to undercut a White House effort to work with the Kremlin where it can on strategic and security issues.

A Russian judge ordered Khodorkovsky jailed until 2017 after being convicted of theft and money-laundering. The case was seen in the West as a test of the rule of law in Russia and by many analysts as a political vendetta against an adversary of Russian Prime Minister Vladimir Putin.

Once Russia’s richest man and head of Yukos, a now defunct major oil company, Khodorkovsky is in the final year of an eight-year sentence imposed after a politically charged fraud and tax evasion trial during Putin’s 2000-2008 presidency.

In the latest trial, prosecutors said he and Lebedev stole nearly $30 billion in oil from Yukos subsidiaries through price mechanisms and laundered some of this. Khodorkovsky’s lawyers called the charges an absurd pretext to keep him in jail.

U.S. officials said the case raised serious questions about Russia’s commitment to the rule of law.

“We remain concerned by the allegations of serious due process violations, and what appears to be an abusive use of the legal system for improper ends, particularly now that Khodorkovsky and Lebedev have been sentenced to the maximum penalty,” said State Department spokesman Mark Toner.

When Khodorkovsky and Lebedev were convicted on Monday, U.S. Secretary of State Hillary Clinton said their second trial raised serious questions about the apparent selective application of the law.

“Simply put, the Russian government cannot nurture a modern economy without also developing an independent judiciary that serves as an instrument for furthering economic growth, ensuring equal treatment under the law, and advancing justice in a predictable and fair way,” Toner added.

VERDICT COMPLICATES RUSSIA‘S WTO BID

A senior official of President Barack Obama’s administration suggested the new sentence will make it harder for Russia to join the WTO.

“It is not going to help their cause, it is only going to complicate their cause,” the official, who spoke on condition of anonymity, told Reuters.

“The WTO is a rules-based, rule of law organization. Most countries around the world do not look at this verdict as a demonstration of the deepening of the rule of law in Russia. It will definitely have an effect on Russia’s reputation.”

However, U.S. officials say helping Russia join the WTO will remain a priority for the Obama administration next year. Obama has strongly backed Russia’s campaign for WTO membership, which would boost foreign investment in that country.

Putin has said he expects Russia to join the WTO in 2011.

Asked if Obama would call Russian President Dmitry Medvedev to discuss the verdict, the senior U.S. official said: “They have spoken about this case repeatedly in previous meetings. I suspect next time they talk this will be a subject.”

The official said the verdict was unlikely to affect the Obama administration’s efforts to reset relations with Moscow.

”We are going to pursue our interests across the board and not link our cooperation on Iran to what is happening with Mr Khodorkovsky. That is another aspect of our relationship.

“That said, promoting the rule of law and advancing democracy in Russia is also a goal of the Obama administration. Regarding that goal, this feels like a setback.”

JACKSON-VANIK COULD BE TEST

Matthew Rojansky, deputy director of the Russia and Eurasia Program at the Carnegie Endowment for International Peace, said there was nothing the United States could do to prevent Khodorkovsky from being removed from Russia’s political scene.

“They have this very explicit dual track policy which says we are going to do business, we are going to keep working together where we have shared interests, but we are going to speak out loudly ... on our areas of disagreement,” he said.

However, he said perceived Russian backsliding on democracy and human rights could make it harder to make progress in other areas, particularly where the U.S. Congress is concerned.

“In the next two years you’ll see a bit of a rebalancing of that (dual-track approach) in the Obama administration’s policy,” said Heather Conley, director of the Europe program at the Center for Strategic and International Studies think tank.

Conley said this may be partly driven by the U.S. House of Representatives, where Republicans take control in January.

One test of congressional sentiment may be on any repeal of the Cold War-era Jackson-Vanik amendment, which tied U.S. trade relations to emigration rights for religious minorities in Russia and has long been a thorn to Moscow. (Editing by Christopher Wilson)

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