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Vladimir Putin: Dear Aleksander Grigoryevich! Allow me to greet you warmly. I would like to point that Russian-Belarussian relations are developing successfully in all areas. This regards trade and economic cooperation, our legal relations, and military and technical cooperation. I note with satisfaction the contract on cooperation with the Kaliningrad Region that was just signed recently—I think in October. Colleagues from different Belarussian departments and ministries took part in this. It is a good document, a promising document. The Kaliningrad Region is very close to you. And therefore I think it represents an area of mutual interest. In the high-tech field we shall develop and carry out together a project on remote sensing of the earth from space. We shall work in other areas as well.

Along with this, with respect to the transition to a new system of taxation in the destination country, the VAT, it is unfortunate but first and foremost this system is tantamount to a failure. I am confident that this is only temporary but nevertheless, it affects the total amount of trade. Moreover, as far as I understand both Russian and Belarussian partners are now sometimes forced to work through the markets of other countries, including through the Ukraine. Of course, as a whole it is not bad to exploit all possible opportunities, but it is obvious that for our bilateral relations we should improve this mechanism. And we absolutely shall improve it.

I would like to confirm our agreements regarding mutual relations between our financial departments. You remember that we spoke about how it is necessary to support our Belarussian partners to arrive at an equitable decision regarding energy deliveries. The Russian Government has prepared the necessary documents and I hope that they will be adopted by the end of this year. In general we are dealing with lots of issues. I am glad to see you and to talk about the wide range of questions relating to our cooperation.

Aleksander Lukashenko: Vladimir Vladimirovich thank you very much. I would very much like to discuss some questions related to our cooperation with you. There are some questions on which I would like to consult you. I told you about this on the phone. I absolutely confirm that our mutual relations are not bad at all, even our trading relations. Even though we have had certain setbacks, they did not affect the financial situation at all. It is true that the setbacks are temporary. We shall resolve all the technical issues related to the VAT; experts are already finding the appropriate solutions and in the next half year we can easily attain and surpass the level of trade that we had. This is possible because we have things to trade and there is a demand for those goods in both Russian and Belarussian markets. Therefore I do not see a big problem here.

Vladimir Putin: But the volume is big. Over nine months some twelve billion dollars.

Aleksander Lukashenko: Last year it was eighteen. We shall probably reach this level. For this reason I do not see a big problem.

On the other hand, Vladimir Vladimirovich, I would like to thank you for the fact that the Government and the energy companies executed your order. We have practically formulated the contract for energy deliveries to Belarus according to our agreement. So thank you very much. And here problems are not arising and have not arisen. We have learned to save and to save properly. This year we shall probably need just a little bit less gas, and oil too, because we have enough for our economy. So here we do not have big problems either, but there are certain issues I would like to discuss with you in private. You know that we are on the eve of presidential election in Belarus and you know what is happening around our country. And therefore I would also like to inform you about this issue, and you have promised to tell me something as well.