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Russia: Federation Council Passes Historic Land Code

Russia's upper house of parliament yesterday gave final approval to a bill lifting a ban on the sale of land that was one of the last vestiges of the Soviet economic system. RFE/RL Moscow correspondent Francesca Mereu looks at the reaction of Russia's different political factions to the new Land Code.

Moscow, 11 October 2002 (RFE/RL) -- On 10 October, Russia's upper house of parliament, the Federation Council, easily passed (103 votes to 29, with nine abstentions) a bill that permits limited sales of land. The State Duma, or lower house, overwhelmingly approved the new Land Code in the last of three readings last month.

The Land Code -- which received strong support from Russian President Vladimir Putin, who is expected to sign it soon -- does not apply to farmland, which is due to be addressed in a future bill.

The Kremlin hopes that the current legislation will boost economic reforms and attract foreign investment. The absence of workable land legislation has been one of the largest deterrents to foreign businesses and is blamed for slowing Russia's economic development. Until now, land sales had been regulated by the country's local legislatures using a complex and sometimes archaic system of laws.

Despite the pro-Kremlin leanings of the Federation Council, yesterday's parliamentary debate over the Land Code did not go smoothly. The bill was strongly opposed by the Communist and Agrarian parties, who argued the bill would allow foreigners and wealthy Russians to buy up Russian land. In fact, the new Land Code affects only about two percent of Russian land.

Alexander Nazarchuk, the leader of the Agrarians in the Altai regions, said he was concerned the new bill would legitimize all illegal land sales made before the bill was passed. He also said the bill would leave Russia's forests wide open to purchase and exploitation: "Why are we in such a hurry? Let's sit down and try to find an agreement. This code makes it possible not only to [build on] land but also to privatize our woodlands. This is what you all are voting for."

Mikhail Odinzov, a lawmaker from the Ryazan region, said that the Federation Council's political factions should support the president's will despite any differences over the Land Code: "It is impossible for those who support the advantages of private property and those who are against it to come to an agreement. [But we should remember that] when we voted for [Putin], he said he would back both private property and a market economy. Now we have to decide: Are we with the president's policy or against it?"

Russia's 1993 Constitution allows Russians to buy and sell land, but parliament has traditionally been reluctant to pass legislation that would put that right into effect.

Russia's minister for economic development and trade, German Gref, called the Land Code a big step forward for Russia's economy. He says it will prevent the black market from profiting unduly from the sale of land. He said such "shadow sales" cost the Russian government between $1 billion and $2 billion a year:

"First of all, the bill will prevent the black market [from taking revenues from land sales]. When you have 10,000 percent of [revenues] that come from the sale of land, we can say that land-sale revenues are comparable to those from drugs and arms sales and from different black-market businesses. This bill will prevent these kinds of things. [Now] these revenues [can] go to municipal and regional budgets."

Moscow Mayor Yuri Luzhkov criticized the Land Code's price restrictions on land occupied by public city facilities. But the mayor said he would have voted for the code despite his objections, saying it would contribute to the more active use of land and boost investor confidence.