Adamov was charged with leading a criminal group that embezzled some $110 million from Russia's state budget and other state enterprises and organizations. The verdict, which was announced in February, when the ex-minister was arrested in the courtroom, had not come into full legal force yet.
"The panel of judges ruled that the [lower] Moscow Zamoskvoretsky Court's February 19 decision be revised ... and the 5.5-year prison term be changed to a suspended sentence," the Moscow City Court said.
The public prosecutor in the case said he would not be appealing against the ruling. "I do not object to the court's ruling," Viktor Antipov said.
But the ex-minister said he would appeal the verdict and seek his acquittal.
"I will appeal against the court's decision and seek an investigation against those who allowed this legal situation to occur," Adamov said.
Adamov's lawyers earlier said the prosecution had failed to provide any evidence to substantiate their client's guilt, and the sentence was too severe.
Adamov, 69, who served from 1998 to 2001 as Russia's nuclear energy minister, was originally arrested in Switzerland in May 2005 at the request of the United States, where he was accused of misappropriating $9 million allocated to Russia for nuclear safety projects.
The ex-minister was extradited to Russia in early 2006 to face an investigation into large-scale fraud and abuse of office charges and subsequent trial and was released on bail in July 2006 on condition he did not leave the country.
Charges against Adamov are still pending in the U.S.
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