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. Last Updated: 07/27/2016

Land Code Approved in Final Reading

APA Communist supporter protesting the Land Code outside the Duma on Thursday.
The long-awaited Land Code sailed through the State Duma in a third and final reading Wednesday, but not without some of the controversy that has swirled around the legislation for years.

Shortly after the vote, Communists and their supporters cried foul, saying at least 25 deputies had not known that they were approving the Land Code, which allows Russians and foreigners alike to buy and sell commercial and residential land in cities and villages.

The vote was 257-130 with one abstention. Pro-Kremlin lawmakers refused to call for a new vote.

"This is a very important event for the development of civilized land relations in the country," Trade and Economic Development Minister German Gref told reporters after the vote. "Approval of the Land Code creates conditions for development of land relations."

Deputies said that the Land Code puts an end to the confusion and inevitable corruption created by the hundreds of existing local and federal decrees and regulations governing property.

"The bill will allow us to put an end to gray land sales," Vladimir Pekhtin, head of the Unity party, said ahead of the vote.

The Land Code, which will affect about 2 percent of Russian territory, does not include agricultural land -- which is to be addressed in separate legislation -- and bans foreigners and foreign organizations from owning property in areas considered to be of strategic importance, such as near borders.

The code also legalizes ownership of about 40 million dacha plots, land under enterprises in St. Petersburg, farm lands in the Saratov region and hundreds of other properties that have been sold over the past decade under legislation authorized by former President Boris Yeltsin and regional legislative assemblies.

St. Petersburg alone already has 9,600 hectares of municipal land registered as belonging to Russian and foreign companies, according to the Baker & McKenzie law firm.

About 5,000 hectares of farmland have been sold in Saratov.

"[The Land Code] is probably one of the most important legislative acts that the Duma has handled, and it is a very important issue for foreign investors in particular," said Chris King, director of business development at the Colliers HIB real estate firm. "This market has many risks to it, and every time you take one risk away from a potential investor, it's the best thing."

"Land ownership has long been cited by our foreign investor clients as a key obstacle to investment," added Adrian Moore, partner at Baker & McKenzie. "Taken with other reforms, developers and manufacturing companies in particular should now take the opportunity to look again at what Russia has to offer.

Despite praise from foreign observers and liberal lawmakers, Communists and their supporters lashed out at the legislation Thursday. Several dozen protesters rallied outside the Duma against land sales.

Alexander Kotenkov, the Kremlin's representative to the Duma, reassured opponents that the code would not affect farmland.

"When you talk about millions of peasants who will suffer if the code is adopted, you are not right. The code does not apply to them," he said.

Despite the controversy raised by the issue, many rural dwellers have expressed support of such sales and even the sale of agricultural land, the legislation for which is expected to be sent to the Duma later this year.

"Such a lot of land is wasted now. I would rather someone worked on it," Yevgeny Atmashkin, general director of the Moscow region-based Lotoshino dairy farm, said Wednesday in an interview. "Of course, land must be sold only to those who will till it. And I would not mind if foreigners buy it. If they pay workers good money, why not?"

If all goes as expected, the sale of land could be legalized in about a month. The Land Code will be sent to the Federation Council within a week, and its lawmakers are scheduled to vote on the legislation two weeks later. President Vladimir Putin, who has been pushing for the code's passage, is expected to then quickly sign the code into law.