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Vladimir Putin: Distinguished Board members! Officers and generals!

Today we are to review together the results of the work and determine the priorities for the Federal Security Service in the current year.

It has been a difficult year for the FSB, for Russia and for all the security agencies in the country. Added to the traditional problems were new ones, including those connected with the rise of international terrorism and the September 11 events in the United States. You had to tackle a range of complicated operational tasks and contribute to the development of adequate responses to the new threats.

In this connection I would like to say right off that on the whole I consider the performance of the FSB to be satisfactory. And I believe that the structural and personnel improvements you have undertaken are correct and timely.

I hope that these transformations – along with measures to upgrade the effectiveness and quality of work – will have a real impact on the substance of the activity of the security agencies. The focus of that activity is protection of citizens’ rights, protection of the state against internal and external threats, ensuring the national security of Russia in the broadest sense of that word.

Your paramount task still remains the fight against terror, in all its manifestations. And the FSB plays a significant, indeed the spearhead role in that.

I must say that your efforts went a long way to bringing about a dramatic change in the situation in the North Caucasus. The main elements of the terrorist infrastructure have already been destroyed. Many bands and their leaders have been liquidated. Your efficient and professional work has saved the lives of many civilians and servicemen. Sometimes you did it at the cost of your own lives. It is our duty to remember the price that has to be paid for peace in Chechnya.

I could cite very many examples. But I cannot help mentioning at least two episodes last year. These are quotations from documents presenting cases for the award of government decorations. On March 2, 2001 one of your comrades, Vladimir Nikolayevich Cheprakov, took part in detaining bandits in a location in Chechnya together with a group of servicemen of the FSB and the Interior Ministry of Ingushetia. The bandits offered armed resistance. At the moment of arrest one of them, using children and women as human shields, threw a grenade. Senior Lieutenant Cheprakov covered it with his body and died to save the lives of children, women and his comrades.

On June 17, 2001 another of your comrades, Major Tyunin, was leading a unit which captured a bandit in Chechnya who also threw a grenade, and the Major covered it with his body. There are multiple examples.

It is our duty to remember our dead comrades and the wounded and we must do everything to help the relatives and loved ones of our comrades-in-arms.

Dear colleagues,

Cutting international channels of finance for terrorists is a relevant and challenging task. In this connection I would urge you to step up your cooperation with the members of the antiterrorist coalition, with our CIS partners and other regional organisations.

In addition, success in the fight against terror depends in many ways on the quality of operational and investigatory work. We should reverse the situation when there are unreasonable delays in putting the terrorist leaders and perpetrators of crimes and terrorist acts on trial. Otherwise there will be no logical conclusion to your efforts.

Ensuring the economic and financial security of the state is, as before, the key task of the FSB. Russia is increasingly becoming an inseparable part of the world economic system and it is imperative to update the approach and the methods used by the special services in that area.

We are open to honest business, clean capital, broad information exchange and the flow of skilled labour into the country. But it is important to protect our economy against international crime, industrial espionage and unfair competition.

I would like to stress that the interests of the state are inseparable from those of the national business community. Consistent protection of our enterprises and their technological and commercial secrets is an important part of your work.

The situation dictates the need to review many traditional approaches to the protection of state and commercial secrets. The old measures based largely on bans of various sorts, often make no sense and sometimes impede economic growth and political stability in the country.

Obviously, only a civilised interaction with the agents in the domestic market economy based on legitimacy and modern economic ideas can enable us to effectively fight rampant crime and corruption.

And finally, another general remark. One key requirement of the work of the FSB or indeed any other security agency, is the ability to promptly react to new threats and their changing character. I am referring above all to spheres connected with the defence industry, protection of scientific and technological secrets and the problems of illegal migration.

By the way, the channels of illegal migration are often the same as the trails of the terrorists, drug traffickers and arms smugglers and illegal finance. For example, natural persons who are non-residents buy up to 45% of hard currency a year at the country’s financial and credit institutions. In many cases it is nothing if not diversion of finances into the shadow sector, into criminal or “grey” business.

On the whole I would like to say that the situation in the world and in the country is changing fast. You should not only be able to track these processes but to profoundly analyse their nature and to behave proactively. And we will discuss in a more narrow circle the measures that must be taken.