Date: 10/04/2019
Name: Naveen Thevar
Student Id: 003011111
Legal Ethical & Social Environment
BADM-537-40
Case Brief: Week-6
CASE BRIEF 7.1
In re Yukos Oil Company Securities Litigation
2006 WL 3026024 (S.D.N.Y.)
1. Describe how Yukos is alleged to have saved significant amounts in taxes.
Yukos grossly underpaid its taxes from 2000 to 2003 to the Russian Federation by illegally taking advantage of
the ZATOs’ preferential tax treatment. Yukos booked oil sales at “well below” market prices to seventeen trading
companies, all of which were registered within ZATOs. Without taking physical possession, the trading companies
sold the oil to customers at market prices and claimed the tax benefits of their ZATOs. However, the profits were
“funneled back to Yukos and Yukos paid taxes only on the initial below-market sales while reaping substantial
profits from the low-tax market-price sales. Yukos tax strategy presented enormous risk because it violated
