Russian Foreign Ministry Concerned About Sanctions on MTS

• Category: Uzbekistan
(Dow Jones Newswires) – Moscow speaks out against Uzbek authorities’ decision to imprison Uzdunrobita director general.

The Russian Foreign Ministry Wednesday said it is concerned about the situation with Mobile TeleSystems’ Uzbekistan subsidiary Uzdunrobita, after Uzbek authorities suspended the mobile operator’s license and put a senior official into custody.

“We have officially informed the Uzbek side of our concerns about the decision to put this subsidiary’s general director, Russian citizen Radik Dautov, into custody, which seems to be a rather severe sanction,” the Russian Foreign Ministry said.

The dispute, which analysts fear may lead to MTS exiting the market, broke out earlier this year when Uzbek authorities launched a near $1.3 million back-tax claim against MTS. On July 17 authorities in Uzbekistan have announced the suspension of the operating license of the Russian-owned mobile communications company for 10 days. Uzbek officials said MTS-Uzbekistan has been responsible for a series of technical violations, and its operations will be suspended. According to the MTS, the suspension affects millions of Uzbek mobile phone users. An MTS statement said the firm has some 10 million clients among Uzbekistan’s population of 28 million.

“MTS believes the suspension of its Uzbek company’s license is unreasonable and violates the rights of the foreign investor provided in domestic and international legislation,” the Moscow-based company said in an e-mailed statement. It also said that as of July 17 the company had fully complied with the instructions and orders of the Uzbekistan telecommunications authority, including those relating to the appropriate use of base stations and fiber-optic communications. The company said the actions of the Uzbek authorities may be interpreted as “baseless attacks on the business of the Russian investor.”