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. Last Updated: 07/27/2016

Civil Code: New Basic Law

After three years of legal and parliamentary debate, Russia is close to finally implementing a new Civil Code which will become the country's basic commercial law.

According to the Center for Institutional Reform and the Informal Sector, the code "will be the fundamental legislation governing all market relations in the Russian Federation, in effect, its economic constitution."

IRIS, a U.S. AID-funded organization to aid legal reform in transitional economies, worked as adviser to the commission that drafted the code, which is scheduled to come into effect Jan. 1.

Part One of the code has yet to be approved by the Federation Council and by President Boris Yeltsin. Analysts, however, say it is unlikely to encounter further major obstacles.

"It's a very important development," said Alexander Makovsky, a presidential advisor and chairman of the commission that is drafting the code.

The bill will replace the Soviet-era Russian Civil Code of 1964 that has formed the basis of the legal system here.

"The code will replace Soviet law and wipe away the legal patchwork and replace it with a complete framework of civil law," said Lane Blumenfeld, director of IRIS.

The first part of the code lays out basic definitions of civil law guaranteeing freedom of contract and protection of private property. It also promotes commercial lending by establishing a more efficient system of debt recovery.

A second part of the code, due to reach parliament next year, will deal with banking, finance, leasing, intellectual property, inheritance and other issues.

The most important aspect of the code, Blumenfeld said, is that it creates a comprehensive body of legislation.

The code will render null and void any prior law that conflicts with it. The Justice Ministry is currently working on a way to replace old legislation.

In future, new legislation will need to be coordinated with the civil code, although parliament will be able to amend the code and pass laws that override it. In theory, if the president issues a decree that contradicts the code then the courts have a legal basis for overruling the edict. In the absence of the Constitutional Court the Supreme Arbitration Court should be able intervene.

In some areas, the code specifically seeks supplementary legislation. For example, it calls for a law from parliament to clarify the regulations governing joint-stock companies.

Recent Legislation

Cash Auctions (State Property Committee Instruction No. 2469p, Oct. 6) Sets out conditions for participating in phase two of Russia's privatization program. The regulation details conditions for participating in cash auctions, the rights and responsibilities of the sellers of enterprises, the registration of property rights and circumstances when share deals will be declared invalid.

Privatizing Publishing (Government Order No. 1119, Oct. 1) Calls for the privatization of a number of state-run publishing houses, design and typesetting companies and book distributors. Lists enterprises to be sold off.

Foreign Correspondents (Government Order No. 1055, Sept. 13) The government has issued a new set of rules on the accreditation and stay of foreign correspondents in Russia that supercede those drawn up under the Soviet Union.

Trading Treasures (Government Order No. 1089, Sept. 26) In order to defend consumers' rights, the government instructs the Committee on Precious Metals and Stones to begin licensing and regulating companies that buy jewelry from the public.

Color Copying (Government Order No. 1158, Oct. 11) Requires registration of the holding and use of color copying machines with Interior Ministry after Jan.1 to crack down on the role this technology plays in counterfeiting and fraud.