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gazeta.ru
January 24, 2002
Duma Approves Controversial Nationalisation Bill
By Andrei Litvinov
The pro-Kremlin factions in the State Duma are having problems establishing a concerted position on vital economic issues. Irrespective of the government’s violent objections, the lower house approved the bill on nationalisation in the 1st reading. Paradoxically, the draft was submitted to the Duma by deputy Adrian Pouzanovsky, a member of the People’s Deputy Group, known for its special loyalty to the Kremlin. Some observers presume the deputies approved the bill to remind the government that it had long since promised to submit its own draft.
The law approved by the house on Wednesday considerably increases the cases in which private property can be nationalised. 239 deputies voted in favour of the controversial bill, 75 voted against, and only 2 abstained.
The result of the vote shocked the government and surprised observers: many had predicted that none of the numerous draft versions of the nationalisation bill would get enough support.
The bill has been harshly criticised not only by the government, but also by the Duma property committee, dominated by Unity, the largest pro-governmental faction.
Nonetheless, Pouzanovsky’s bill, by no means the most radical of the drafts submitted to the Duma, received approval.
Both the Russian Constitution, adopted in 1993, and the Civil Code call for the enactment of a nationalisation law, but since the Civil Code was passed and came into force (1995-1996), little progress has been made. Over the years the State Duma has accumulated piles of draft bills on the issue, but none were ever discussed, let alone passed.
The Constitution, and the Civil Code provide that human and civil rights and liberties, which include the right to private ownership of property, may be restricted by federal law only if absolutely necessary for the protection of the fundamentals of the constitutional system, morality, health, rights and lawful interests of other persons, for ensuring the defence of the country and the security of the state. The Civil Code states, ‘converting private property owned by individuals and corporate bodies into state ownership (nationalisation) shall be done with just compensation for the value and other damage incurred.’
However, many deputies have obviously developed their own vision of what nationalisation really is and how it should be implemented.
In 1995 the communists and the liberal democrats submitted their draft bills on nationalisation, elaborated by the hard-line Vasily Shandybin and the flamboyant Vladimir Zhirinovsky respectively.
LDPR’s draft called for extending the legal grounds not only for nationalisation, but also for requisition and confiscation of property. Under Russian law property may be requisitioned, i.e. taken away from the owner, in case of natural calamities and similar extraordinary circumstances, but the person whose property is requisitioned receives fair compensation. Confiscation, or forfeiture, of property is a punishment imposed for certain crimes. Maybe Vladimir Zhirinovsky was too busy attracting the public’s attention to his himself to find out the difference between nationalisation, and other forms of termination of property ownership.
Shandybin in his equally controversial draft proposed to make an enterprise subject to nationalisation if 3/4 of its staff makes such demand. The communists did admit that the owner deprived of his property should be entitled for compensation, yet, that compensation would be paid not in cash, but in governmental bonds to be redeemed by instalments in the course of 10 years, which sounded very much like confiscation.
More moderate drafts were elaborated by Yabloko’s Ivan Grachev and by Grigory Tomchin of Vybor Rossii (Choice of Russia) faction.
Pouzanovsky’s draft approved by the State Duma on Wednesday confirms the owner’s right for fair compensation once his property is taken away by the state. The market value of that property is to be determined by an independent auditor.
However, the same bill provides that the compensation will be paid not in a lump sum, but in instalments. The property owner would get up to 10 billion rubles immediately, and the rest would be paid in quarterly instalments.
The bill proposes that nationalisation of property owned by foreigners be carried out in compliance with Russian legislation on foreign investments and international treaties between Russia and other states.
Pouzanovsky’s bill does not apply to cases when property is taken away from the owner by force, which means that the procedure for requisitions, confiscations, or compulsory purchase of a land plot for state or municipal needs under a court order will remain the same.
The bill allows the nationalisation of property if “converting it into the state ownership ensures more effective defence of national security interests and more steady economic growth.”
There are absolutely no chances that the bill will make it through the 2nd and the 3rd reading. But even if it does, the president will never sign it.
The government has promised to submit a nationalisation bill long ago, but has still failed to do so.
Maybe, by approving Pouzanovsky’s controversial bill, the deputies simply want to remind the government that they are still waiting for their draft to arrive.
On Wednesday the State Duma chairman Seleznyov said he had received new promises from government officials who assured him that the draft would be submitted to the lower house before the middle of the year.
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