Okno: Policy Developments in Russia

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Russia: Recent Policy and Business Developments

Sampling of briefs from the East/West Letter

Central & Eastern Europe Policy Developments

Ukrainian Policy Developments

Policy Developments in other FSU countries

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Russian region to allow sale of land On 12 November, the legislature of the Saratov region in Russia passed the first law in Russia making it legal to buy and sell land freely. The new legislation defies federal parliamentary leanings, which tend toward strict restrictions on private ownership of land. However, Saratov's land reforms are supported by President Boris Yeltsin, who has been struggling with the federal parliament over a new land code. Although the Russian Constitution passed in 1993 guarantees the right to buy and sell land, no regulations have been passed outlining how it is to be done. In September, the lower house of Parliament overrode Mr. Yeltsin's veto of a land code forbidding the sale of farmland and maintaining Soviet-era restrictions on the agricultural sector. The upper house had yet to act by 9 December. Nevertheless, more Russian regions are preparing land laws similar to that passed in Saratov, including the Jewish Autonomous oblast, Kaliningrad, Tatarstan, Sverdlovsk, and Samara. Many other regions have asked for copies of the Saratov law for further study.

November 1997

Lukoil buys legal software from Microsoft In a departure from the prevalent use of pirated software on the Russian market, oil giant Lukoil signed a contract with U.S. software developer Microsoft in early September to legalize its software use, the first major Russian corporation to do so. Under the contract, Lukoil purchased more than 5,000 copies of Microsoft's desktop operating systems, office applications, and server software. Microsoft and other software manufacturers like Oracle Corp. are trying to convince Russian companies that they can cut costs and boost profits by using legal software. Pirated software amounts to more than 90% of the Russian market by some estimates.

September 1997

U.S. companies PepsiCo and Leucadia International plan to invest $375 million to build six soft-drink plants in Nizhny Novgorod, Samara, Volgograd, Yekaterinburg, Novosibirsk, and Vladivostok. They plan also to build 50 distribution centers with 380 trucks to serve the plants. The whole effort should create 5,500 jobs in the localities. The capital investment will be combined with an advertising campaign and efforts to link directly with local wholesalers and retailers. PepsiCo is also planning operations in Kazakhstan and Kyrgyzstan.

September 1996

Russia removed all export duties on 1 April in accordance with its agreement with the IMF. Only duties on crude oil and natural gas will remain; crude oil duties will be halved from 20 ECU per metric ton to 10 ECU and those for gas will be cut from two ECU per metric ton oil equivalent to one ECU. (from East/West Letter, March/April 1996)

April 1996

As of 1 January, foreign banks are again allowed to provide services to Russian residents after a ban on such activity from 1993 was lifted. They will not be permitted to trade in Russian equities until after 1 July 1999. The lifting of the ban is unlikely to affect the operations of foreign banks in Russian since most of their clientele are foreign companies operating there and the current minimum deposit to open an account in foreign banks is the equivalent of about $40,000. Commissions charged by foreign banks are also prohibitively high for most Russian enterprises. (from East/West Letter, December 1995/January 1996)

January 1996

The Russian government asked for a four-year delay in its commitment to comply with a global ban on ozone-depleting gases that takes effect on 1 January 1996. The Ministry of Environment claims it needs considerable funds and four years to convert industry to comply with the 1987 Montreal protocol, which phases out the production of chlorofluorcarbons (CFCs). Russian industries are still emitting 90,000 tons of ozone-depleting gases every year. (from East/West Letter, October/November 1995)

October 1995

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