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Yukos Oil Company (Russian: IPA: juks) was a petroleum company in Russia which until 2003 was controlled by Russian oligarch Mikhail Khodorkovsky and a number of other prominent Russian businessmen. After Yukos was bankrupted Khodorkovsky was convicted and sent to prison.

Yukos headquarters was located in Moscow. Yukos was one of the biggest and most successful Russian companies in 2000-2003. In 2003 following a tax reassessment the Russian government presented Yukos with a series of tax claims that amounted to $27 billion. As Yukos's assets were frozen by the government at the same time the company was not able to pay these tax demands.1 On August 1 2006 a Russian court declared Yukos bankrupt.2

Most of Yukos's assets were sold at low prices to oil companies owned by the Russian government.3 The Parliamentary Council of Europe has condemned Russia's campaign against Yukos and its owners as manufactured for political reasons and a violation of human rights.4 Contents 1 History 2 Tax claims 3 Forced sale of assets 4 Bankruptcy 5 Management 6 Yukos Oil Company claim in the European Court of Human Rights 7 See also 8 References 9 External links 9.1 Data 9.2 Articles History Mikhail Khodorkovsky in 2001

The company was created on April 15 1993 by Resolution . 354 of the Russian government and consisted of the following enterprises: a Western Siberian oil extraction enterprise Yuganskneftegaz and oil refineries in Samara Oblast: Novokuybyshevsk NPZ Kuybyshev NPZ and Syzran NPZ (NPZ stands for NeftePererabatyvayushchy Zavod literally "petroleum processing plant"). In 1995 decree . 864 of the Russian government added Samaraneftegaz to Yukos.

Its Russian abbreviation comes from the names of the main entities that initially comprised the company: (Yuganskneftegaz: Nefteyugansk + petroleum + gas) and (Kuybyshevnefteorgsintez: Kuybyshev + petroleum + organical synthesis).

Yukos was one of the world's largest non-state oil companies producing 20% of Russian oilabout 2% of world production. Its assets were acquired in controversial circumstances from the Russian Government during the privatization process of the early 1990s.5 The initial period of "oligarchic privatization" was characterized by bloodshed and Yukos was certainly no exception.67 Alexei Pichugin the former Security Chief of Yukos has been convicted on multiple counts of murder8 and attempted murder and is now under investigation along with Yukos partner Nevzlin for the shooting death of Vladimir Petukhov the mayor of the Yugansk oil province and a vehement opponent of Yukos on Khodorkovsky's birthday in 1998. Lawyers for Pichugin and Nevzlin who lives in self-imposed exile in Israel say that both the charges and the new investigation are politically motivated.

In 1996 the majority of Yukos shares (90%) were bought by Group Menatep in a series of auctions. At the time Yukos as most other Russian energy companies was badly affected by the economic recession in the 1990s. After privatisation Yukos started recovering very quickly and in the course of several years became one of Russias largest oil companies and a leader in corporate governance reform 1.

In April 2003 Yukos agreed to a merger with Sibneft but the merger was soon undone in the aftermath of the arrest of Yukos CEO Khodorkovsky in October 2003.

In December 2003 a tax re-audit was conducted by the Russian tax authorities after which Yukos was issued with tax claims that exceeded its revenues for 2002 and 2003. At the same time Yukos's assets were frozen by the government. In December 2004 its core asset Yuganskneftegaz was sold in an auction to an unknown company called Baikalfinansgrup which was later bought by state oil company Rosneft. Eventually Yukos was bankrupted in 2006 and liquidated in 2007.9 Tax claims In July 2004 Yukos was charged with tax evasion for an amount of over US$ 7 billion. The Russian government accused the company of misusing tax havens inside Russia in the 1990s so as to reduce its tax burden; havens were set up by most major oil producers in outlying areas of Russia which had been granted special tax status to assist in their economic development; such "onshore-offshore" were used to evade profit taxes resulting in Yukos having an effective tax rate of 11% vs a statutory rate of 30% at the time. Yukos claims its actions were legal at the time and that the company used the same tax optimisation schemes as other Russian oil companies such as Lukoil TNK-BP and Sibneft. However Yukos was the only one to be charged with tax evasion and penalised by the authorities.10 Yukos subsidiaries also declared the oil they produced to be "oil-containing liquids"11 to avoid paying full taxes. A general crackdown on such tax evasion practices began with Putin's presidency with numerous companies closing or purchasing their trading vehicles. It is widely believed that Yukos severe treatment at the hands of the tax authorities was due to its attempt to purchase a large block of Duma deputies so as to block oil tax reform legislation. In a move to prevent bankruptcy management made a friendly offer to the government to pay 8 billion dollars in a period of three years. A management presentation from December 2004 shows that the tax claims put the "total tax burden" for 2000 2001 2002 and 2003 at 67% 105% 111% and 83% of the company's declared revenue during those years. As a comparison the annual tax bill of Gazprom is about $4 billion on 2003 revenues of $28.867 billion. Yukos parent company the Menatep group lobbied extensively and successfully to influence Western public opinion retaining Margery Kraus of APCO 2 who successfully pushed through resolutions inter alia before the US House of Representatives and the Council of Europe. According to a resolution 12 of the Council of Europe "Intimidating action by different law-enforcement agencies against Yukos and its business partners and other institutions linked to Mr Khodorkovsky and his associates and the careful preparation of this action in terms of public relations taken together give a picture of a co-ordinated attack by the state." This "raises serious issues pertaining to the principle of nullum crimen nulla poena sine lege laid down in Article 7 of the ECHR and also to the right to the protection of property laid down in Article 1 of the Additional Protocol to the ECHR." "The circumstances of the sale by auction of Yuganskneftegaz to Baikal Finance Group and the swift takeover of the latter by state-owned Rosneft raises additional issues related to the protection of property (ECHR Additional Protocol Article 1). This concerns both the circumstances of the auction itself resulting in a price far below the fair market-value and the way Yukos was forced to sell off its principal asset by way of trumped-up tax reassessments leading to a total tax burden far exceeding that of Yukoss competitors and for 2002 even exceeding Yukos total revenue for that year." Forced sale of assets In the Western media and the Russian opposition media the high-profile arrest of Khodorkovsky is usually attributed to his activism in the Russian political process.131415 On October 31 2003 shortly after the arrest of the company's CEO the Russian government froze ownership of 44% of the company's shares. The reason given was to prevent a group of shareholders led by Khodorkovsky from selling a large stake of the company to the US oil firm Exxon. A Yukos shareholders' meeting scheduled for December 20 2004 was to discuss a "crisis plan." A Russian company must hold such a meeting before it can apply for bankruptcy in Russia. The Russian Government sold Yukos's main production unit Yuganskneftegas at auction on December 19 2004 to recover some of $28 billion in alleged tax debts following the loss of an appeal by the firm. Menatep the company representing Mikhail Khodorkovsky promised to challenge the sale's legality in a number of countries and to sue the buyer and any company helping to fund the deal. The expected buyer was the 38% Russian state owned company OAO Gazprom. Some European and American oil firms decided not to bid. On December 19 2004 the Baikalfinansgrup an unknown company registered several days before the auction in Tver at an address where a snack bar was located won the auction for Yukos's subsidiary Yuganskneftegas with a 260.75 billion rubles ($9.4 billion) bid.16 Yuganskneftegas was a few months earlier valued at between $15 billion and $17 billion by DrKW which the Russian government hired to value the subsidiary. Suggested financiers to the Baikal Finance Group are Gazprom Sberbank the Russian central bank China National Petroleum Corporation and ONGC (India). The reason for this arrangement may be that Gazprom feared international legal action against it after a Houston Texas court ruling that barred Gazprom from bidding for the unit. This ruling was subsequently vacated. According to people familiar with the auction only two bidders registered for and were present during the auction process: Baikalfinansgrup and Gazprom's former oil unit Gazpromneft. Accounts from the auction say that the first bid of $8.6 billion came from Baikal. When the auctioneer asked Gazpromneft to offer its price a representative of the company asked to make a telephone call and left the room. A few minutes earlier the auctioneer had told participants that using a mobile phone or leaving the room was against the rules. When a Gazpromneft representative returned to the room Baikal made a bid of $9.3 billion. Gazpromneft never placed a bid or spoke out. Shortly after the Yuganskneftegaz auction Rosneft Russian state-owned oil company acquired 100% of shares in Baikalfinansgrup. The acquisition of Yuganskneftegaz significantly increased Rosneft's profits and made it one of the largest oil companies in Russia.17 In the course of these events the value of Yukos shares plunged. Bankruptcy On 15 June 2006 based on a bank deposit of $4M and its American CEO's Houston home Yukos filed for bankruptcy protection in the United States estimating its assets at $12.3 billion and its debts at $30.8 billion including "alleged taxes owed to the Russian government". It accused the Russian authorities of "an unprecedented campaign of illegal discriminatory and disproportionate tax claims escalating into raids and confiscations culminating in intimidation and arrests". After several weeks of deliberation the Houston court declared that under no conceivable theory could Yukos assert domicile in the US. On 25 July 2006 the creditors of Yukos decided to file for bankruptcy after the bankruptcy manager stated that the company should be liquidated.18 Management CEO: Steven M. Theede CFO: Bruce K. Misamore Chairman of the board: Viktor Gerashchenko By mid-December 2004 all members of the board of Yukos and most of the company's senior managers had left Russia some of them because of "fear of arrest" after being "summoned for questioning by prosecutors". According to a December 2004 Houston Texas court filing the CFO resides in Houston. According to a company spokeswoman the CEO resided in London UK as of December 2004. Executives Mikhail Brudno and Vladimir Dubov fled to Israel in 2003 and were seen on February 2 2005 in Washington D.C. at an official function of George W. Bush.1920 Both men are cited in an international arrest warrant regarding their involvement in the Yukos tax case. On Wednesday 6 April 2006 the company's Executive Vice Predisent Vasily Aleksanyan was arrested just six days into his new role.21 Yukos commented on its web site that "We can only assume that this action against him is a direct result of his accepting a position to work to protect Yukos Oil Company and its legitimate stakeholders." The next month it was reported that some individuals established themselves as the "New Management" of Yukos. However this was apparently an illegal act as Yukos "emphatically rejects" the legitimacy of the "new management" which has Vinokurovwho as President. According to Yukos these individuals are "loyal to Rosneft" and have as goal the downfall of Yukos. In July 2006 one week before creditors would vote if they should file for bankruptcy Steven Theede resigned his function because he believed the outcome of this vote was already fixed and therefore this meeting would qualify as a "sham".18 Yukos Oil Company claim in the European Court of Human Rights On 23 April 2004 shortly after the imposition of the tax assessment for the year 2000 the former management of Yukos submitted an application to the European Court of Human Rights.22 Yukos claim in the ECHR argues that the company's rights protected by the European Convention on Human Rights were violated in Russian courts which led to its bankruptcy and liquidation; it also argues that Yukos has been singled out for discriminatory treatment. Yukos complained that their rights were breached under several articles of the Convention specifically: Under Article 6 (right to a fair trial) of the Convention the applicant company complains about various defects in the proceedings concerning its tax liability for the year 2000. Under Article 1 of Protocol No. 1 (protection of property) taken alone and in conjunction with Articles 1 (obligation to respect human rights) 13 (right to an effective remedy) 14 (prohibition of discrimination) and 18 (limitation on use of restrictions on rights) of the Convention it complains about the lawfulness and proportionality of the 2000-2003 Tax Assessments and their subsequent enforcement including the forced sale of OAO Yuganskneftegaz. Lastly the applicant company complains under Article 7 (no punishment without law) of the Convention about the lack of proper legal basis selective and arbitrary prosecution and the imposition of double penalties in the Tax Assessment proceedings for the years 2000-2003. 23 Following an admissibility assessment that took five years the court declared the Yukos application admissible on 29 January 2009.24 This in itself was a significant achievement for Yukos as the Court declares admissible only less than 5% of all submitted applications.25 The hearing on merits of the Yukos Oil Company v Russia case in the European Court of Human Rights took place on 4 March 2010. Yukos Oil Company was represented by Piers Gardner Barrister of Monckton Chambers. The Russian side was represented by a team of lawyers which included Georgy Matyushkin Representative of the Russian Federation at the European Court of Human Rights and British lawyer Michael Swainston. The decision on this case is expected before the end of 2010.26 The claim amounts to $98 billion. This is the largest claim to be brought in the courts 60-year history. The claim is an estimate of what the value of Yukos would have been if its assets had not been stripped away and the company had not been liquidated in 2007.27 See also Wikimedia Commons has media related to: Yukos Eminent domain Oil price increases since 2003 References "Yukos case against Russia begins at European court". BBC News. 4 March 2010. http://news.bbc.co.uk/1/hi/world/europe/8549226.stm.  "Yukos Creditors Told Russian Oil Company Is Doomed". 25 July 2006. http://www.bloomberg.com/apps/newspid20601085&sida.CwLx2HL1ps&refereurope. Retrieved 2008-08-31.  "Russian state oil company wins another Yukos auction". New York Times. 8 August 2007. http://www.nytimes.com/2007/08/08/business/worldbusiness/08iht-yukos.4.7045853.html.  Council of Europe Parliamentary Assembly. "Resolution 1418 (2005)". http://assembly.coe.int/Main.asplink/Documents/AdoptedText/ta05/ERES1418.htm. Retrieved 6 April 2010.  Hugh Fraser (2004-07-27). "Russia's oligarchs: Their risky routes to riches". BBC News (UK). http://news.bbc.co.uk/2/hi/business/3927523.stm. Retrieved 2010-07-20. "Russia's most valuable assets were sold at bargain prices to insiders such as Mr Khodorkovsky.... Menatep bought Russia's second largest oil company Yukos for $300m. It also took on $2bn in debts which made the price more realistic."  ric Toussaint (2005). Your money or your life: the tyranny of global finance. Haymarket Books. p. 366. ISBN 9781931859189. http://books.google.com/booksidor5NcgF3Ac0C&pgPA366&lpgPA366&hlen&eigC5GTPnRG8KB8gaizSxBQ&saX&oibookresult&ctresult&resnum6&ved0CEAQ6AEwBQ#vonepage&q&ffalse. "The Russian oligarchs used brutal and criminal methods like those used by the "robber barons" in the United States at the end of the late nineteenth and early twentieth centuries."  Bruce Kapferer (2005). Oligarchs and oligopolies: new formations of global power. Berghahn Books. p. 59. ISBN 9781845451745. http://books.google.com/booksidq1F4otnSovMC&pgPA59&lpgPA59&hlen&eigC5GTPnRG8KB8gaizSxBQ&saX&oibookresult&ctresult&resnum3&ved0CDEQ6AEwAg#vonepage&q&ffalse. "Using his Khodororkovsky's close contact with state officials as well as illegal methods and violence he saw his wealth and empire continue to grow until he challenged Putin."  "Jail term for Yukos security boss". BBC News. 30 March 2005. http://news.bbc.co.uk/2/hi/business/4393003.stm. Retrieved 2008-08-31.  Goldhaber Michael D. (July 1 2010) "A Lifetime of Litigation" American Lawyer http://www.law.com/jsp/tal/PubArticleTAL.jspid1202459235731&ALifetimeof&slreturn1&hbxlogin1 retrieved 2010-07-19  "Russian officials draw up a memorandum to the European Court". Kommersant. 30 January 2007. http://www.old.khodorkovsky.info/authority/134825.html. Retrieved 2010-07-23.  "Manager of Yukos' "daughter" admitted tax evasion" (in Russian). 12 September 2005. http://lenta.ru/news/2005/09/12/samara/. Retrieved 2008-08-31.  "Resolution 1418 (2005): The circumstances surrounding the arrest and prosecution of leading Yukos executives". Council of Europe. 25 January 2005. http://assembly.coe.int/Documents/AdoptedText/TA05/ERES1418.htm. Retrieved 2008-08-31.  "Profile:Mikhail Khodorkovsky". BBC News. 16 June 2004. http://news.bbc.co.uk/1/hi/business/3213505.stm. Retrieved 2005-12-11.  Erin E. Arvedlund (6 July 2004). "Pressure Builds in Kremlin Vs. Oil Giant". New York Times. http://query.nytimes.com/gst/fullpage.htmlres9C01EEDE173BF935A35754C0A9629C8B63&sec&spon&pagewantedall. Retrieved 2005-12-11.  Steven Lee Myers; Erin E. Arvedlund (28 October 2003). "Oil Tycoon's Arrest Scares Russian Markets". New York Times. http://query.nytimes.com/gst/fullpage.htmlres9804E2DC1E31F93BA15753C1A9659C8B63. Retrieved 2005-12-11.  "Russia: Just Who Is Baikalfinansgrup". Radio Free Europe/Radio Liberty. 20 December 2004. http://www.rferl.org/content/article/1056507.html. Retrieved 2010-08-21.  "Yukos oil boosts Rosneft profits". BBC News. 13 February 2006. http://news.bbc.co.uk/1/hi/business/4708056.stm. Retrieved 2010-08-20.  a b "Creditors vote to bankrupt Yukos". BBC News. 25 July 2006. http://news.bbc.co.uk/2/hi/business/5212570.stm. Retrieved 2008-08-31.  Moscow Times February 4 2005 Issue 3099 Page 5 "Yukos Fugitives Feted in U.S.". 4 February 2005. http://www.themoscowtimes.com/stories/2005/02/04/043.html.  "Top Yukos official Aleksanyan detained in Moscow". 6 April 2006. http://en.rian.ru/russia/20060406/45394467.html. Retrieved 2008-08-31.  http://www.theyukoslibrary.com/index.phpoptioncomcontent&viewarticle&id20&Itemid29 http://cmiskp.echr.coe.int/tkp197/view.aspactionhtml&documentId863889&portalhbkm&sourceexternalbydocnumber&tableF69A27FD8FB86142BF01C1166DEA398649 http://www.echr.coe.int/echr/echren.htm http://www.theyukoslibrary.com/index.phpoptioncomcontent&viewarticle&id23&Itemid33 http://www.youtube.com/watchvIiC115TyIto Kramer Andrew E. (4 March 2010). "European Court Ready to Hear Yukos Case". The New York Times. http://www.nytimes.com/2010/03/04/business/global/04iht-yukos.html.  External links 3 Yukos v. Russian Federation (Jurisdiction) Awards of 30 November 2009 and Ex-Yukos Owners Win International Ruling of 1 December 2009 and Hague Panel Clears Way for $ 100 Billion Claim of 1 December 2009 and Yukos Owners Win the Jurisdiction Award Which Is Studied by Russia of 1 December 2009 and Yukos v. Russia Award Positive for Energy Investors of 2 December 2009 and A Victory for Holders of Yukos of 2 December 2009 and Shearman and SterlingWins Round for Yukos of 4 December 2009 and ASIL Insight on Yukos v. Russia Awards of 3 August 2010 and ECT Arbitrations and Arbitration Database and PCA-UNCITRAL Permanent Court of Arbitration The Hague: Yukos ECT Arbitration Oral Hearings 17 November-3 December 2008 and Former Yukos Owners Begin $ 50 Billion Claim Against Russia of 17 November 2008 and 19 November 2008 and European Voice and GLM Seeks Minimum $ 28.3 Billion of 4 November 2008 and 23 September 2008 and EU Observer and Ocnus and 4 April 2008 and Yukos Arbitration of 4 February 2008 and Energy Charter Treaty (ECT) Arbitrations and ECT Provisional Application Further information about the current YUKOS Oil Company claim in the European Court of Human Rights 3 Data Yahoo! - OAO NK Yukos company profile Articles Report: The Yukos Affair its Motives and Implications (Centre for Eastern Studies) Khodorkovsky verdict: Business views Browder and Kraus FT.com / Industries / Energy & mining - Mysterious bidder pays $9.4 billion for Yukos unit Analysis: Gazprom's losing bid for Yukos - (United Press International) Knight Ridder: Russia's dismantling of Yukos seen as part of a troubling trend Arrested oil tycoon passed shares to banker Jacob Rothschild - (The Washington Times) Matteo M. Winkler Arbitration without Privity and the Russian Oil: The Yukos Case before the Houston Court already pub'ed in 27 U. PA. J. INTL ECON. L. 115-153 (2006)