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. Last Updated: 07/27/2016

Upper House Passes Key IMF-Backed Legislation

The Federation Council on Friday approved several key bills required to make Russia eligible for a badly needed loan from the International Monetary Fund.

Federation Council speaker Yegor Stroyev said the house will approve all bills drafted by the government to meet the IMF's conditions for the $4.5 billion loan. Stroyev played down the opposition by some council members to several of the bills.

"We will write down our remarks on the [bills] and will perfect them jointly,'' Stroyev was quoted as saying by Itar-Tass. "There should be no conflicts between the branches of power, so that the government should have the scope and opportunity to advance.''

The documents approved Friday include a bill that would allow the Central Bank to buy gold directly from mining companies, making it easier to increase reserves of precious metals and foreign currency. The Federation Council also approved a bill that would impose a tax on big luxury cars, a bill that would allow the bank to issue securities and another bill that would allow the liquidation of insolvent banks.

The IMF has long urged Russia to stop wasting scarce resources on subsidies to shaky banks and to accelerate bankruptcy procedures against them. The new bill would make the liquidation of an insolvent bank mandatory rather than voluntary.

The bills have already been approved by the State Duma, the lower house of parliament, and now go to President Boris Yeltsin for approval. In talks this week, a visiting IMF team praised Russia's performance and indicated that lending might be resumed.

Meanwhile, Russia offered CS First Boston a deal that would let the bank recover the funds it has invested in Russian treasuries through participation in a Siberian investment project, Interfax reported Friday.

The government defaulted on what was then about $40 billion worth of the treasuries, known as GKOs and OFZs, last August. The new deal would let CSFB, which rejected the government's debt restructuring program, recover its losses through a silicon production project in Siberia.

Deputy Minister Vladimir Kossov said he thought the $180 million silicon project would be attractive to CSFB because its business plan has been drafted by Ernst & Young, one of the world's five top auditing companies.

CSFB didn't immediately comment on the offer.