Articles by Professor William E. Butler
On July 9, the Russian Federation took a giant step toward introducing the principle of a ""national regime"" for foreign investments. President Boris Yeltsin signed a new Law on Foreign Investment that repeals and replaces the previous law, which has been in force since 1991, with minor amendments. The new law became active on July 14. As Russia's market economy matures, the case becomes progressively weaker for allowing foreign investors ""special privileges"" vis-?-vis their local competitors and investors. Some pure economists would argue the foreign investor should receive no advantage whatever. While the principle of such a ""national regime"" may be sound economically and, usually, legally, there are disturbing elements in the style and approach of the 1999 version. A strong whiff is evident in Article 2, which defines the basic concepts used in the law.
One year ago, the adoption of a new law on protection of investor rights would have been big news and the usual deluge of analysis in the press would follow. The new federal law ""On Defense of Rights and Legal Interests of Investors on the Securities Market,"" also called the ""Investor Protection Law,"" was signed into law March 5 and published March 11 with little fanfare or comment. Likewise, the various programs to rebuild investor confidence being discussed at both the legislative and self-regulatory level have regrettably received virtually no public attention. The new Investor Protection Law expands the protections available to investors and introduces new concepts designed to enhance an investor's ability to bring successful claims in court and receive compensation for damage. The law also repeats several of the protections contained in subordinate legislation, but elevates their status by including them in a federal law.