Russia raises the stakes in quest for Tsar's gold

Published on 02/05/2004 01:00

THEY were just a small part of the Tsar’s incredible wealth, 22 boxes filled with ingots of gold given away in a dubious arms deal between a Russian commander and the Japanese.

But now what has become known as the ‘Tsar’s gold’ has taken centre stage in a series of diplomatic moves by Russia and Japan designed to bury old rivalries over territory and build new cooperation through lucrative energy projects.

Russia has called for talks with Japan over the return of the ingots, now worth 45bn, allegedly transported out of the country by White Army commander Admiral Alexander Kolchak who led the resistance against the Bolshevik ‘Reds’ until his death in 1920.

Tension over the unreturned riches is a stumbling block to warmer relations between Tokyo and Moscow as they step up co-operation over huge energy projects in the Far East.

Admiral Kolchak is thought to have sent at least 22 boxes filled with gold ingots to Japan in exchange for weapons that he did not receive. The bullion was never returned and Russian officials believe it is now stored in the vaults of the Bank of Tokyo Mitsubishi.

Moscow first pushed for the return of the Tsar’s gold in the early 1990s but its efforts faltered. However, the Russian foreign ministry has confirmed it has made "certain investigations and inquiries to the Japanese side" in a fresh attempt to win it back.

Spokesman Alexander Yakovenko said: "Russia and Japan are trying to build, good, neighbourly relations. Such trust calls [for both sides] to remove doubts and stop sweeping things under the carpet."

One such contentious issue is the Kuril Islands in the Pacific Ocean. Soviet soldiers occupied four of these islands belonging to Japan in 1945 and refused to hand them back - the two countries have never signed a peace treaty formally ending their Second Word War conflict.

Vladlen Sirotkin, a historian who has written four books about Tsarist riches held abroad, said: "For this dispute to be settled it must be tackled as a whole package - the gold and the islands together."

Analysts say the establishment of a Council of Wise Men at the end of last year to defuse tensions make fresh talks all the more likely. The council is headed by Moscow mayor Yuri Luzhkov and former Japanese prime minister Yoshiro Mori.

Yakovenko said: "It would be quite natural to discuss the gold issue along with other subjects at the Council of Wise Men." Tokyo has so far declined to comment officially on the issue.

More than 80 years after it was passed to Japan, the full story of the gold which once belonged to Russia’s last Tsar, Nicholas II, is still shrouded in mystery.

Between 1914 and 1922 about 500 tonnes of Russia’s imperial gold reserves are thought to have been whisked abroad as security to buy weapons. Of the total amount sent overseas, an estimated 200 tonnes ended up in Japan, while five-and-a-half tonnes from the personal coffers of Tsar Nicholas was allegedly intercepted and stolen by the Japanese in 1917 en route to England.

Originally the Tsar had hoped to set up a nest-egg with the gold in London in case he was forced to abdicate. He was murdered by the Bolsheviks before he could flee Russia.

During the First World War gold and platinum ingots and other riches had been moved deep into Russia amid fears that the Tsarist army could be overrun on the German front. But after the Russian revolution in 1917 the country was ripped apart by civil war. A year later, socialist revolutionaries overran state repositories in Kazan, seizing most of the country’s gold reserves.

The treasure - including ingots, coins, jewellery and diamonds - was packed into 25 carriages and dispatched to Siberia as the Red Army advanced. But in Omsk, 1,500 miles east of Moscow, forces loyal to Kolchak seized the train.

Before his death at the hands of the Bolsheviks, Kolchak passed much of the gold to the Japanese government as a down-payment for military supplies. However, according to Sirotkin, "not a single rifle or shell was delivered".

The gold’s estimated value today is 45bn, similar to Russia’s total gold and foreign currency reserves and enough to pay off two-thirds of the country’s foreign debt.

Analysts believe that a lack of solid evidence and a desire to strengthen economic ties has prevented Moscow from blowing the issue into a full-scale diplomatic spat. "It’s difficult to understand why the issue is being raised now," said Viktor Pavliatenko, an expect on Russo-Japanese relations at Moscow’s Institute of Far East Studies. "Mentioning it in parallel with the Kuril Islands dispute is completely misplaced."

Some commentators have speculated that Moscow Mayor Luzhkov raised the issue of the gold to dissuade Tokyo from pursuing its territorial claims, a major obstacle in the past to improved relations.

But Yevgeny Velikhov, a member of the Council of Wise Men, said commercial interests were paramount. "Gold is gold, islands are islands, those problems existed long ago and won’t go away," he said. "They need to be solved, but only once we have established a good economic base for bilateral relations. That’s the essential task."

The stakes are high for both countries. Last month, Japanese officials confirmed that Moscow and Tokyo are to build a giant oil pipeline between eastern Siberia and Russia’s Pacific coast. The 3bn-4.5bn pipeline will allow Japan to reduce its reliance on Middle Eastern reserves, and boost Russian exports. It was approved despite fierce opposition from Beijing which hoped the supply would be routed to China.

Last week another huge energy deal was in the offing as Russia’s national power company announced plans to lay a 1bn cable under the sea to provide electricity to Japan.