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American Russian Law Institute

A US-Russian not-for profit public policy research and advisory organization dedicated to promoting legal reform in Russia and newly independent countries of the former USSR,  based upon democratic principles, market economy and rule of law


by: Maria Berdnikova

July 13, 2001 MOSCOW (MT~Wire) Russian Duma today approved the bill intended to combat money laundering on third and final reading by a more than 2 to 1  vote margin (244 deputies voting for, 107 against and one abstention.) The bill requires ...

Historic Conference On Legal Reforms is Underway in St. Petersburg

07/10/2001 (MT~NewsWire™) St Petersburg. Judicial reform is the key task facing the Russian government, said the World Bank President James Wolfensohn during his opening speech at the international conference Empowerment, Opportunity and Security through Law and Justice.  For us at the World Bank the reforms of the legal and judicial systems are the key issues, since any development is impossible without legal and judicial boundaries that ensure justice and the absence of corruption, the World Bank chief said, adding that a year and a half ago he proposed holding such a conference to the President Vladimir Putin, who "willingly backed this idea."

Taking part in the conference were luminaries of the Russian Judiciary, including Kremlin's deputy administration chief Dimity Kozak, the Chief Justice of Russia Vyacheslav Lebedev, Minister of Justice of Russia Yuri Chayka, as well as nearly 400  experts from Europe, the US and Latin America.

"We worked on the issues presented at this conference for almost two years" - said Alexander Fishkin a Russian and American lawyer and an advisor to the Russian Legal Academy in an interview with NTV and Voice of America reporters - "however the real work is ahead: in the next three months, working with our Russian and Western colleagues we must design a legal framework for implementing the programme laid out during the conference."

Mr.  Wolfensohn also stated that the World Bank places big hopes on this conference and wants to ensure that it is not merely a forum, but the next stage towards legal and judicial reforms in Russia.

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S&P Analyst Says Legal Reforms Key To Russia Rtg Upgrade
07/10/2001 Dow Jones International News (Copyright (c) 2001, Dow Jones & Company, Inc.)

LONDON -(Dow Jones)- Reform of Russia 's legal system will be necessary if Standard & Poor's is to raise its credit rating for the country's foreign debt, S&P Managing Director Konrad Reuss said Tuesday.

Speaking to investors at a conference on Russia , Reuss said evidence that the base for economic growth is expanding beyond commodity production and that the government can continue to improve its fiscal position will also be essential if the agency is to upgrade the country's foreign debt ratings further.

S&P last upgraded Russia June 27, when it raised the government's foreign currency debt rating to B from B-.

Reuss said S&P is waiting for the passage of legislation reforming the judiciary, allowing for the privatization of land, and reforming the labor code and the corporate tax system, before taking further action.

"A number of these laws have seen first or second readings in the Duma," Reuss said. "The question is implementation, which would send very strong signals to us."

The S&P analyst said economic growth is "too much" based on commodity production. The Russian economy grew by 7.7% last year, but that was largely due to high oil prices.

"We want to see capital flight subsiding, Russian banks investing in their own economy, and foreign investment returning," Reuss said.

Reuss said the ratings agency is concerned about Russia 's ability to meet a spike in debt payments in 2003, when the state faces foreign debt payments of $19.3 billion and domestic debt payments of $6.5 billion.

"It's manageable, but it's still a problem," said Reuss. "Despite the economic recovery we still have to think about the downside scenario, where there is weakness in commodity prices and further weakness in the world economy."

-By Paul Hannon, Dow Jones Newswires; 44-20-7842 9491

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EU: Conclusions of June 25 General Affairs Council Part 2 of 2.
Reuters English News Service
(C) Reuters Limited 2001.

In accordance with Article 2 (2) of the Joint Action 1999/878/CFSP the following projects shall be included on the European Union Co-operation Programme for Non-Proliferation and Disarmament in the Russian Federation:

- support to the Russian Nuclear Safety Authority for developing the regulatory basis and documents for the disposition of weapons grade plutonium;

- support for studies and experimental studies for mixed oxides fuel (MOX) demonstration and licensing;

- a co-operative feasibility study for immobilisation of Russian waste containing weapons grade plutonium;

- support to the Russian Ammunition Agency to fulfil the Russian Federations' responsibilities under the Chemical Weapons Convention (CWC); - support for infrastructure-building related to the destruction of nerve gases stored at the Shchuch'ye site.

* Rule of law, public institutions and civil society - conclusions

* "Following the Gvteborg European Council conclusions on Russia , the Council welcomed the Presidency report on rule of law, public institutions and civil society in Russia , with suggestions for further action by the European Union, as a useful basis for further discussions within the Union.

The consolidation of democracy, the rule of law and public institutions in Russia remains a priority for the European Union in its relations with Russia . Whilst recognising the substantial progress made in Russia during the past decade towards democracy, a pluralistic society with respect for human rights and a state based on the rule of law, the Council noted that considerable deficiencies still remain. These include the implementation of legislation and the functioning of public institutions, including the judiciary. The Council further noted the need to strengthen civil society. In this context, the Council reiterated that developments in Russia in some respects, notably with regard to the situation concerning the independence of media, remained matters of concern. The European Union will closely follow further developments in these areas.

The Council recalled that both Member States and the Community were already actively involved in support of rule of law, public institutions and civil society in Russia . The Council concluded that further efforts in this direction should be made, in close consultation with the relevant Russian counterparts, whereby full use should be made of the means and instruments at the Union's disposal, including the political dialogue, the Tacis and EIDHR programmes, as well as Member States' bilateral programmes.

Future efforts were suggested to include support to the strengthening of the judiciary and other legal institutions, NGOs, notably those actives in the field of democracy and human rights, as well as the independence of media, notably on regional and local level. Efforts to bring Russian legislation into accordance with Council of Europe requirements, including the de jure abolition of death penalty, are important. Joint European Union and Council of Europe activities should be promoted where appropriate.

The Council finally reiterated its serious concern over the situation in Chechnya and called for an urgent political solution to the conflict. Reported violations of human rights must continue to be thoroughly investigated in order to bring perpetrators to trial."


* Small Arms and Light Weapons
* - Conclusions


"The Council expresses its concern over the destabilising accumulations and spread of small arms and light weapons. It wishes to convey its deep concern at the tremendous humanitarian problem caused by the spread of these weapons, which constitutes an obstacle to the reconstruction, economic development and restoration of normal living conditions in the affected countries, including the return of refugees, preventing by the same token humanitarian aid to reach those mostly in need of it.

The Council underlines the high priority it attaches to a successful outcome of the UN Conference on the Illicit Trade in Small Arms and Light Weapons in All Its Aspects (New York, 9-20 July 2001).

The Council recalls its efforts to deal with the problem of small arms and light weapons, in particular through the EU Programme for Preventing and Combating Illicit Trafficking in Conventional Arms, the EU Code of Conduct on Arms Exports, the Joint Action on the EU contribution to Combating the Destabilising Accumulation and Spread of Small Arms and Light Weapons, and the Council Resolution on the Combating of Excessive and Uncontrolled Accumulation and Spread of Small Arms and Light Weapons as part of Emergency Aid, Reconstruction and Development Programmes.

The Council also recalls the active role played by the EU in the adoption of the OSCE Document on Small Arms and Light Weapons by the OSCE Forum for Security Co-operation on 24 November 2000, and the negotiations on the Protocol against the Illicit Manufacturing of and Trafficking in Firearms, Their Parts and Components and Ammunition, supplementing the United Nations Convention against Transitional Organised Crime.

The Council expresses its conviction that an effective response to the suffering and insecurity caused by small arms and light weapons, as well as related issues such as child soldiers, requires a comprehensive Programme of Action with a combination of demand and supply side strategies together with programmes for disarmament, demobilisation and reintegration of ex-combattants, as well as confidence-building, conflict resolution, capacity-building and development. The Programme of Action should outline ways for continued action in these areas.

The Council urges all States to contribute to the adoption by the Conference of a comprehensive Programme of Action."


- Implementation of the 1998 EU Joint Action

The Council took note of the Annual report on the implementation of the EU joint Action of 17 December 1998 on the EU's contribution to combating the destabilising accumulation and spread of small arms and light weapons and the EU Programme on illicit trafficking in conventional arms of June 1997.

The Report focuses on the following aspects:

- national efforts to address small arms related problems;

- efforts at the international level to address these problems, including projects supported by the EU and Member States;

- priorities for future EU assistance.

9. The Council stressed its deep concern about the human rights situation in
China and reaffirmed its conclusions of 22 January and 19 March 2001. It
remained strongly concerned at the lack of respect for fundamental freedoms
in China, including the continuing widespread restrictions on freedom of
assembly, expression and association, the violations of freedom of religion
and belief, the situation of minorities, including in Tibet and Xinjiang,
and the frequent and extensive recourse to the death penalty. It underlined
the importance that concrete steps be taken by the Chinese Government to
improve the human rights situation in the country. Early ratification and
implementation of the Covenant on Civil and Political Rights, implementation 
of the Covenant on Economic, Social and Cultural Rights and co-operation with 
UN human rights mechanisms were essential in this respect. The Council
restated its view that the Union's dialogue with China on human rights was
an acceptable option only if real progress was achieved on the ground. It
recalled its decision to adopt measures to improve the dialogue and to
continue to assess the results on a regular basis. It repeated its desire to 
make the dialogue more transparent and reaffirmed the specific areas where
the EU will be seeking progress. It stressed the importance of deepening the 
co-operation with China in this field and welcomed the intention of the
Commission to define appropriate priorities for co-operation programmes, so
as to complement the human rights dialogue. It welcomed the EU-China human
rights seminars, which supported the dialogue.
III. Integrating China further in the world economy by bringing it more fully 
into the world trading system and by supporting the process of economic and
social reform underway in the country, including in the area of sustainable

10. The Council welcomed the outcome, on 20 June, of EU-China discussions on outstanding issues of EU concern in the context of China's WTO accession. It expressed support for China's WTO accession to take place as rapidly as possible and encouraged a close monitoring of the implementation of its WTO commitments. The Council encouraged China to play a constructive role in the WTO and in global and regional processes of liberalisation in order to increase the potential of China both as a trading partner and a secure destination for FDI. It stressed that the EU and China would mutually benefit from working closely together to liberalise further world trade and strengthen the multilateral trading system, in particular through co-operation in the preparation of a new WTO round of comprehensive negotiations. It welcomed the Commission's intention to continue WTO-related co-operation projects and to undertake additional efforts to help China implement its WTO commitments and deal with the challenges of restructuring its economic, social and legal systems through complementary co-operation programmes and strengthened sectoral dialogues.

11. The Council expressed its support for the reform process in China. China was now faced with the challenges of continuing the reform of the state owned enterprise sector, of the financial system and the social security system. The Council welcomed the Commission's intention to support the reform process through its co-operation programmes, and invited it to ensure that poverty reduction, the promotion of the rule of law and the respect for human rights, gender equality, transparency, balanced regional development and social reform (including social security and key public health needs), were taken fully into consideration.

12. The Council stressed the importance of policy development and implementation in the field of the environment, in order to assist China to achieve more sustainable patterns of production and consumption and pursue a better environmental performance. It considered improvement in this field to be of pivotal importance to economic development and sustainability of the Chinese society as well as to the global environment. It encouraged the Commission to deepen co-operation in this area. The Council also noted with satisfaction the measures and policies undertaken by China towards preventing climate change and expressed its wish for close co-operation between the Union and China in the field of global environmental policy in order to promote the objectives of the UNFCCC and the Kyoto Protocol.

13. The Council welcomed the Commission's intention to develop its existing sectoral dialogues with China (e.g. in the areas of information society, energy, science and technology) and to establish new ones (e.g. on enterprise policy and regulation), as well as to begin negotiations for bilateral agreements with regard to maritime transport and on co-operation and mutual assistance in customs matters, as well as cooperation in the energy field.


IV. Making better use of existing EU resources
14. The Council stressed the need for a close linkage between the EU's
broader China policies and EC-funded co-operation programmes. It called for
closer co-ordination among Member States and the Commission in the design
and delivery of co-operation programmes, so as to promote a more coherent
and effective role for the Union as a whole. It invited the Commission, in
consultation with Member States and the Chinese Government, to finalise the
Country Strategy Paper, setting out priorities for co-operation. It also
encouraged closer co-operation and greater sharing of information between
the Commission, Member States, the UN, the International Financial
Institutions and other donors. It recalled in this context the guidelines on 
strengthening operational co-ordination, which it adopted on 22 January 2001.
V. Raising the EU's profile in China
15. The Council welcomed the Commission's suggestions on ways to enhance the
EU's profile in China and underlined the importance of people-to-people
contacts in order to achieve a stronger mutual relationship. The Council
invited the relevant bodies to find new ways to stimulate the exchange of
people (such as students, entrepreneurs, scholars, tourists, and
journalists) between the EU and China, to promote cultural links, and to
consider new initiatives to link the emerging civil society in China with
that in the EU.

The Council decides to propose to China the following revised structure of the political dialogue between the EU and China:

Annual summits, at the level of Head of State or Government, between China and the EU, their location alternating between China and the EU.

Meetings when needed between Troika Foreign Ministers and their Chinese counterpart, in addition to annual meetings in the margins of the UN General Assembly.

Annual meetings of Troika political directors with their Chinese counterpart, the location of the meeting alternating between Beijing and the EU.

Biannual meetings between Troika and Chinese human rights experts.

Annual meetings between Troika Asia Pacific directors and their Chinese counterparts on Asian and Pacific issues, whenever possible held back-to-back with the EU-China human rights dialogue when that is held in Beijing.

Meetings at least once a year between Troika and Chinese experts on arms export controls, non-proliferation and disarmament issues.

Political consultations between the local troika of political counsellors and the Chinese MFA."


EU Common position on Cuba - conclusions

"The Council took note of the ninth evaluation of the EU Common Position on Cuba. The Council noted that since the previous evaluation last December, there have not been any substantial signs of change of the policy on behalf of the Cuban Government towards the accomplishments of the aims of the Common Position. Furthermore, the Common Position remains the basis of the European Union's policy towards Cuba and therefore the Council took note of its continued validity.

The Council reiterated that the objectives of the European Union towards Cuba remain the encouragement of a process of peaceful transition to pluralist democracy and respect for human rights and fundamental freedoms. Although the socio-economic situation remains precarious the Council has taken note of signs of improvement of living standards for the population.

The Council considers that it is essential that the EU and the Cuban authorities engage in a constructive and frank dialogue on all issues of common interest. The European Union remains open to resume such dialogue. In the light of the ninth evaluation, the Council considers that a broader presence of EU actors in Cuba would lead to a more efficient pursuit of the Common Position as it would offer opportunities for an ongoing process of dialogue, exchanges of experiences and learning for the future.

Therefore, the Council encourages the European Commission to strengthen its efforts for co-operation with, in particular, civil and non-governmental organisations in Cuba. The Council would welcome the engagement in a constructive dialogue with Cuba on a future co-operation framework based on the respect for democratic principles, human rights and the rule of law."


EU-Switzerland relations

The Council

- took note of the state of play of the contacts between the EU and Switzerland regarding various issues under discussion which are essentially Swiss participation in the European Environment Agency, cooperation in the area of statistics, combat against fraud, trade in processed agricultural products, taxation of savings income, general liberalisation of service provision, Swiss participation in programmes regarding training and youth as well as media, Swiss participation in the Dublin/Schengen acquis;

- agreed:

- to request that the technical, institutional and legal questions related to the Swiss request of participation in the Dublin/Schengen acquis be examined, without further delay in the appropriate Council preparatory bodies, in order to prepare for the discussion of a negotiating mandate;

- to ask the Commission:

= to start the negotiations with Switzerland regarding the areas where the Council has adopted mandates (environment, statistics, agriculture and fraud);

= to continue the ongoing exploration contacts with Switzerland regarding the other areas under discussion between the two sides and

= to propose, at the appropriate time and within its competence, draft mandates to the Council in the respective areas;

- to encourage Switzerland to be forthcoming in response to the present conclusions;

- to request the Committee of Permanent Representatives and the EFTA Working Party to continue their monitoring of the ongoing contacts and developments in the various areas under discussion between the EU and Switzerland while involving the relevant bodies of the Council responsible for the different areas.


The Council adopted its position with a view to the 40th Association Council
meeting on 26 June 2001 (see doc. CE-TR 109/01 Presse 272).
- 4th Cooperation Council
The Council approved its position for the 4th Cooperation Council meeting on
26 June 2001 (see document 10230/01 Presse 252).
- EU Common Strategy

The Council also took note of the progress report on the Presidency's Work Plan regarding the implementation of the Common Strategy on Ukraine, elaborated under the responsibility of the Swedish Presidency.

This report focuses the following areas:

- Support for the Economic and Democratic Transition Process in Ukraine;

- Ensuring stability and security and meeting common challenges on the European continent;

- Support for strengthened cooperation between the EU and Ukraine within the context of EU enlargement;

- Cooperation in the field of culture, twinning and exchange programmes;


Inventories and promotion of cooperation.
Association with Slovakia
The Council adopted its position for the 7th Association Council meeting on
26 June 2001 (see document UE-SK 2015/01 Presse 270).
Association with Slovenia
The Council adopted its position for the 3rd Association Council meeting on
26 June 2001 (see document UE-SI 2015/01 Presse 270).
The Council adopted its position for the 2nd EU-Mercosur Cooperation Council
meeting on 26 June 2001 (see doc. 10231/01, Presse 253).
The Council adopted its position for the 2nd meeting of the EU-Chile Joint
Council on 26 June 2001 (see doc. 10232/01, Presse 254).

- 15th Meeting of the EEA Council

The Council approved its position for the 15th meeting of the EEA Council (see doc. EEE 1605/01 Presse 273).


- EEA Agreement

The Council approved a draft Decision of the EEA Joint Committee amending Protocol 31 to the EEA Agreement on cooperation in the specific fields outside the four freedoms (cooperation in the field of education, training and youth).

The draft Decision aims to modify Protocol 31 to extend cooperation in the field of education, training and youth. It provides for a framework for cooperation and sets out the modalities for the full participation of the EEA-EFTA States in the Community programmes and actions in this field ("Preparatory actions for cooperation in the fields of education and of youth policy - expenditure on administrative management" - "Preparatory actions for cooperation in the fields of education and of youth policy").

The Council also approved a Decision of the EEA Joint Committee amending Annex II (Technical regulations, standards, testing and certification) and Anexx XX (Environment) to the EEA Agreement.


Incentive measures in the field of employment

The Council adopted a common position on the proposed Decision on Community incentive measures in the field of employment. The common position will now be forwarded to the European Parliament for a second reading in accordance with the co-decision procedure.

The Community incentive measures are designed to encourage action to promote co-operation between the Member States and support their action in the field of employment. The proposal is based on Article 129 of the EC Treaty and is the last missing piece to complete the implementation of the "Employment" Title of the Treaty. Its purpose is to encourage Community activities to promote employment, in particular by funding jobs. Activities covered by existing instruments are not included in its scope.


Minimum health and safety requirements: exposure to mechanical vibrations

Following the political agreement reached at the Employment and Social Policy Council of 27/28 November 2000, the Council formally adopted a common position on the proposed Directive setting minimum health and safety requirements for workers exposed to risks arising from mechanical vibrations. The common position will now be transmitted to the European Parliament for a second reading in accordance with the co-decision procedure.

The purpose of the Directive is to combat the effects of vibrations causing muscular and skeletal disorders, which are the primary source of occupational illnesses. It will apply to cases in which vibrations are transmitted to the hands and arms, entailing in particular vascular, bone or joint neurological or muscular disorders, and also to vibrations transmitted to the whole body causing in particular low-back morbidity and trauma of the spine.

The proposal adopts action levels beyond which specific prevention measures must be taken, such as choice of work equipment producing the least vibration possible, given the work to be carried out, or entitling the workers concerned to appropriate health surveillance.

The proposed Directive is intended to be the first separate Directive after the "splitting" in 1999 of the Commission's original proposal for 1993, which combined in a single instrument four types of physical agents (mechanical vibration, noise, optical radiation and electro-magnetic fields and waves). The second Directive will deal with the exposure to noise, in respect of which the Employment and Social Policy Council on 11 June 2001 reached a political agreement on a common position.

More information can be found in Press release no 13862/00 Presse 454.


Agreement with Denmark and Greenland
The Council adopted the Regulation on the conclusion of the Fourth protocol
laying down the conditions relating to fishing provided for in the Agreement 
on fisheries between the European Economic Community, on the one hand, and
Denmark and Greenland, on the other. Under the new Protocol, Community
fishermen will enjoy fishing opportunities in waters under the jurisdiction
of Greenland from 1 January 2001 to 31 December 2006.
Council Conclusions on Openess, Transparency and Good Administrative Behaviour

"1. Recalling its conclusions of June 1999, the Council welcomes the progress achieved in the field of openness and transparency since the entry into force of the Treaty of Amsterdam, and reiterates its firm commitment to work towards bringing the institutions of the European Union closer to the citizens.

The Council welcomes in particular the adoption of the Regulation (EC) No. 1049/2001 based on Article 255 of the Treaty regarding public access to European Parliament, Council and Commission documents, the purpose of which is to define the principles, conditions and limits on grounds of public or private interest governing the right of access to those documents, to establish rules ensuring the easiest possible exercise of this right, and to promote good administrative practice on access to documents.

2. The Council recalls its adoption on 9 April 2001 of Decision 2001/320/EC on making certain categories of Council documents available to the public via the Internet, thus simplifying access to its documents.

3. The Council notes with satisfaction the initiative creating a "Citizens' forum" - a "Future of Europe" website ( where all contributions to the debate on the future of the European Union can be assembled and easily consulted.

4. The Council welcomes the progress that has been achieved by the Community institutions and the Office for Official Publications of the European Communities concerning the presentation via the Internet of legislative texts free of charge under a common portal: EUR-Lex (

5. The Council notes the adoption by the SG/HR of a Code of good administrative behaviour for the General Secretariat of the Council of the European Union and its staff in their professional relations with the public."


Public access to documents - Declaration

In the context of the adoption on 30 May 2001 by the European Parliament and the Council of the Regulation regarding public access to European Parliament, Council and Commission documents, those three Institutions have made the following joint declaration:

"The European Parliament, the Council and the Commission agree that the agencies and similar bodies created by the legislator should have rules on access to their documents which conform to those of this Regulation. To this effect, the European Parliament and the Council welcome the Commission's intention to propose, as soon as possible, amendments to the acts establishing the existing agencies and bodies and to include provisions in future proposals concerning the establishment of such agencies and bodies. They undertake to adopt the necessary acts rapidly.

The European Parliament, the Council and the Commission call on the institutions and bodies not covered by paragraph 1 to adopt internal rules on public access to documents which take account of the principles and limits in this Regulation."


Exchange of DNA analysis results
The Council formally adopted a Resolution on the exchange of DNA analysis
results (see doc. 9118/01 Presse 203).
International high-tech and computer related crime
The Council formally adopted a Recommendation on 24-hour contacts for
international high-tech and computer related crime (see doc. 9118/01 Presse
Committee of the Regions

The Council adopted a Decision appointing Mr Guy VAN HENGEL as an alternate member of the Committee of the Regions in place of Ms NEYTS-UYTTEBROECK, for the remainder term of office, which runs until 25 January 2002.END OF DOCUMENT.

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SBJCT: IMF Head in St. Petersburg: economic reforms, supported by a solid legal foundation is a matter of paramount importance.

DATE: JUNE 18, 1999

On June 15, in St. Petersburg, commenced its working the International Economic Forum organized by the Council of Federations (the upper chamber of the Russian Parliament) and the Administration of the President of Russia. The forum is attended by Heads of States and Governments, members of the Russian Parliament, leaders of Russian political subdivisions, Russian and western political and business leaders. The goal of the forum is to exchange ideas as regards international economic cooperation and economic problems facing Russia. Amongst those present was the head of International Monetary Fund, Michael Camdessus who met with the new Russian Prime Minister, Sergey Stepashin and assured him that Russia may count on the continuous assistance of the IMF. Mr. Camdessus and other leaders of international financial organizations stressed that the continuation of economic reforms, supported by a solid legal foundation is viewed by them as a matter of paramount importance.

Apparently the issue of legal reform in Russia, the process of which has been stop and go until now, is becoming pivotal and international financial community wants to see real progress in this area. How do the recent sweeping changes in the government will effect that process? Are real reforms possible? What are roles of publicly funded internationally institutions such as the World Bank, International Monetary Fund and European Bank for Reconstruction and Development in restructuring Russian legal system?

To answer this questions, we invited the director of American Russian Law Institute, Dr. Alexander Fishkin, who, together with our own legal expert, Emanuel Zeltser, for the past five years have been leading the effort in promoting legal reform in Russia.

    Q. Dr. Fishkin, I understand that you attended the forum?

    A. Yes, unfortunately only the first two days: because of the unexpected emergency I had to return to New York. However, a number of my colleagues from the Institute are there and we converse by telephone several times a day.

    Q. Russian legal reform has been your baby for the past several years. How do you see the process being affected by the recent reshuffling of the Russian Government?

    A. Very significantly and in my view, very positively. Former Prime Minister Primakov rose to that role from his post as the head of Soviet intelligence apparatus He is a career KGB operative and the KGB, as we all know was never known as a reform minded organization. Sergey Stepashin was the   Minister of Justice of Russia and always viewed the restructuring of judicial institutions in Russia as a matter of paramount importance. Indeed, under his leadership, significant reforms have taken place already. One of the most notable changes was the transfer of the entire Russian prison system, GULAG from the control of the Ministry of Internal Security, the traditional GULAG ruler, to the Ministry of Justice.

    Q. This is something that you and your Russian colleagues were fighting for years?

    A. Yes, we did and we won. The Internal Security Ministry did not just give up their grip on GULAG. It took a great deal of politicking. We started pressing this issue in 1992. I remember I and my Colleague, Emanuel Zeltser, used to sit though the nights with Nikolay Fedorov, who was the Minister of Justice at the time; drafting and re-drafting this law. Unfortunately when Nikolay became the President of Chuvashia, his successor, Valentine Kovalev was much less interested in promoting the reform.

    Q. I recall that Mr. Kovalev was much more interested in attending the bathhouses in the company of the ladies?

    A. Well, I’ve seen the same video as everybody else in the world. Kovalev was denying that this was him, but I agree, whoever it was it did not appear helpful in promoting legal reform.

    Q. What do you think about Mr. Camdessus remarks? When Emanuel was interviewed by Vladimir Pozner on Eurovision last month he said that the international tax-funded institutions, such as the International Monetary Fund, the World Bank, the European Bank for Reconstruction and Development are interested in playing significant role in the reform process. Do you agree?

    A. Absolutely. The IMF, the EBRD and the World Bank displayed great interest in being involved in this process and we welcome it.

    Q. Emanuel mentioned that your Russian colleagues already work with the World Bank and other institutions? How much progress has been made in this area?

    A. So far the interaction has been slower than what we would like to see. I believe that one of the problems was that the contingent representing the international institutions has not consisted of and/or headed by professional jurists, and therefore could not fully understand the nature of specific legal issues which must be considered in the whole legal reform project. Emanuel feels that some of the personnel on the Russian side, have likewise lacked sufficient qualifications and motivation motivated. We both are confident that appointment of qualified and motivated teams on both sides is the key to successful implementation of the project.

    Q. What steps are you taking to improve the communications with the international institutions?

    A.  In July we will be meeting in Moscow with all the key Russian figures in order to address this matter, amongst others. We will also meet with the senior people at the international institutions in order to share the concerns which I have mentioned. We will crystallize our common objectives and outline the elements needed in order to accomplish them. At this time we are drafting memorandum, setting forth problems which have been encountered in the past couple of years and suggesting concrete steps to resolving them.  This document will be presented to heads of the international financial institutions shortly.  

    Q. You don’t think that Stepashin’s departure from the Ministry of Justice may slow the legal reform initiative?

    A. Not at all. The current Minister, Pavel Krasheninnikov was hand-picked by Stepashin himself and will follow his course. One of the critical elements of our work is getting involved the leaders of the Russian business community in the project.

    Q. Are you saying that the Russian nouveau riches are interested in promoting legal reform? I believe that in October last year the House Majority Leader Dick Armey said that "a substantial portion of the American taxpayer money to the IMF may now be financing the lavish lifestyles of Russian oligarchs". Is he wrong?

    A. Mr. Armey is right. I would go farther than that by saying that virtually all of the IMF $20 billion went into the pockets of the oligarchs such as the former boss of Inkombank, Vinogradov, and his cronies. However, these individuals were not businessmen but swindlers, thieves, who, with the help of the corrupt government officials, managed to convince international publicly funded institutions to dump billions of dollars, most of which ended up in their own pockets. Real businessmen realize that legal reform is a staple of integrating Russia into the market economy. They work closely with us in crafting what I hope will become a real blue-print for true reform.

<Friday, June 18> <Translated from Russian>

Copyright © American Russian Law Institute

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SUBJECT: International efforts aimed at assisting Russia in creating a solid legal infrastructure is the key to resolving most other problems and overcoming the hurdles in integrating Russia into the World economic community.

Immediately following the disintegration of the USSR, the issue of judicial reform in Russia was viewed as one of paramount importance. Initially we saw tangible steps being taken towards rebuilding the Russian legal system. The adopting of the Constitution of the Russian Federation by national referendum on December 12, 1993, became a major move towards the implementation of RLR. Most notably, it affirmatively pronounced the judiciary as a separate and independent branch of power (Article 10). Articles 120, 121 and 122 refer to independence, tenure and immunity of judges. Article 124 provides for federal funding of the Court. Another major step was the passing of the Law on the Constitutional Court of the Russian Federation. (Code of Federal Legislation of the Russian Federation, 1994, No. 13, p. 1447) However, during the past 5 years the pace of judicial reform considerably slowed down. The major contributing factors for the slowdown are:

- continued political instability of Russia and resulting fears of senior Government officials that any significant strengthening of the judicial branch may jeopardize their political future. Highly placed officials of Russia's Procurator General's office apparently are concerned that their power and control would be substantially reduced in the event of the strengthening of the judicial branch of power. In addition, concerns have been voiced regarding possible diminution of the influence of the Ministry of Justice in the judicial sphere;

- devastating economic downturn, accompanied by the fall of industrial production, defaults in payments by Russian enterprises, Government salary indebtedness to workers, major capital flight abroad and the resulting financial crisis;

- corrupt government officials fearing that the strengthening of the legal system may impede their ability to use their official position for personal enrichment.

Paradoxically, the "objective" problems which slowed down the the interaction with the international institutions also include the very efforts of the Russian legal establishment aimed at reforming itself.  The major events in this category included:

- transfer of control of the correctional institutions system from the Ministry of Internal Security (MVD) to the Ministry of Justice. This was naturally a monumental undertaking, both in terms of political struggle to pass the law as well as the logistics of actually effecting the transfer -- keeping the higher echelon of the two ministries busy for the past two years. However I view this as a major positive step because it was aimed at terminating the Gulag secrecy and monstrous abuses which took place under the KGB controlled MVD-NKVD apparatus, clearly a political victory of the progressive leaders of the Russian judicatory institution;

- creation in 1998 of the Federal Judicial Department (the "JD") under the auspices of the Supreme Court of Russia which assumed the functions of court administration. Shifting control over the administration of the courts from the Ministry of Justice, i.e., an agency of the executive branch, to the Supreme Court appears to be a stepping stone towards ensuring the independent functioning of the judicial branch -- promoting separation (rather than commingling, as before) of the functions of the judicial and executive branches;

- creation of the institution of Federal marshals, whose functions include providing security for judges and court personnel and enforcing the decisions of the Court. This also is a major step in the right direction. Previously, Russian judges, unprotected from unlawful pressure by criminal elements, often succumbed to such pressure out of fear for their personal safety -- permitting their decisions to be influenced by Russian Organized Crime ("ROC") figures;

- Presidential decree (of May 16, 1998) establishing the Academy of Justice under the auspices of the Supreme Court of Russia and the Supreme Arbitration Court of Russia. The significance of this is not only in the improved system of education of Russian judges but perhaps more importantly, this action appears to be the first meaningful measure in consolidating the courts of general jurisdictions with "arbitral courts" - those which handle strictly commercial disputes amongst legal entities.

The above described events, while generally positive, impeded the abilities of the key individuals to devote the necessary time and attention to the interaction with the international institutions.

On a smaller and more personal scale, the project was hampered because some of the principal players, started distancing themselves from the concept of RLR almost two years ago --due to their own political agenda. Sergey Pashin Sergey Pashin (the father of the law respecting jury trials) was fired as the head of the Judicial Reform Department ("JRD"), and, in 1997, the JRD itself was dismantled. himself "resigned" (involuntarily) a few weeks ago. Sergey Pashin took a judgeship in Moscow City Court and, by and large, disassociated himself from the RLR project. Nonetheless a number of principal persons are in place and appear eager to jump-start the project.

There also exists regrettable lack of understanding on the part of those who are entrusted to implement critical elements of the RLR project of the roles of international financial institutions, which are still viewed as Santa Clauses, or worse, a pestering grandmother forcing a spoon into the mouths of her playful grandchildren. A perception exists amongst many in the Russian Government that the these publicly funded western institutions have no choice but to continue to finance Russia "so that we don’t start selling our nuclear warheads to Iraq" -- and should do so without too many conditions (alternatively, that the "conditions" are merely formalities and may be disregarded once the funding is procured.) This cynicism is dangerous and counterproductive and foments a remiss attitude towards what should be a concerted joint effort of the international institutions and the Russian legal establishment. Even assuming, arguendo, that a certain truth is present in terms of the connection between the nuclear weapons and Western funding, in reality the Russian parties realize that (a) Russia is still the primary beneficiary of international efforts directed at helping it develop a solid legal infrastructure; and (b) no country may base its future upon the prospects of being an international beggar, "selling" the threat of its pile of rusting weaponry.

Moreover it feeds another fallacious notion to wit, the credit extended by the international institutions may be treated as something less than a bona fide debt, as was evidenced by the recent sad events in the Russian banking sector. In addition, as history shows, certain persons in the Russian Government routinely disregard or unilaterally alter the agreed upon allocation of loan proceeds after a loan has been disbursed -- undermining the very purpose of the project. One of the important parts of the project should be the passage of a law concerning loans from international publicly funded financial institutions.

ARLI has identified six focal points of attention at this time as regards RLR. These are:

a) Further improvement of the activity of JD. As discussed above, the appearance of the JD last year, vesting the administration of the courts to the courts themselves was a major step in RLR. It is critical however to ensure the proper functioning of the Department which must start with training of its officers and middle management personnel in efficient court administration. It is also important to educate judges to become true masters of the Department in order to ensure that the Judicial Department does not degenerate into becoming a "leaf" of the executive branch parasitizing on (or possibly even influencing) the judicial branch but remains strictly a liaison vehicle between the Supreme Court and the lower courts as well as servicing the administrative needs of the court system;

b) Development and adaptation of new Uniform Rules of Civil and Criminal Procedure. The current procedural rules are antiquated and do not reflect the structural changes in the system. Importantly, these essentially Soviet era Rules do not correspond to the newly adapted Penal Code (the Penal Code of the Russian Federation, Federal Law of June 13, 1996, No. 64 - FZ); Criminal Enforcement Code (the Criminal Enforcement Code of the Russian Federation, Federal Law of January 8, 1997, No. 1 - FZ. and the Civil Code of the Russian Federation (Part 1), Federal Law of November 30, 1994, No. 52 - FZ) and the Civil Code (Civil Code of the Russian Federation (Part 2), Federal Law of January 26, 1996, No. 14 - FZ. (Part 1 of the Civil Code was translated into English and codified by the undersigned with commentaries and explanations by professors of the law school of Pittsburgh University (Copyright © Oceana Publications, Inc.1993, 1995 (ISBN: 0-379-101831)) Civil Code). As regards the Criminal Code, principal proposals by the foremost authorities in this field (e.g., Prof. Kuntseva E. F., Prof. Alekseyeva L. B., Judge Pashin S.A.), suggest specific changes in the area reflecting the right of the accused to an attorney during all stages of preliminary investigation, shifting the power to issue arrest warrants from prosecutors to judges, and a number of other changes aimed at improving the legal area of human rights. Deputy Chief Justice of the Supreme Court of the Russian Federation, Zhuikov V.M., and other federal judges as well as practicing attorneys suggest that the Civil Code should strengthen and expand the role of attorneys in the court system which is expected to create an environment encouraging settlements; strengthen control over judicial resources and judicial economy and promote general esteem for the court as an independent branch of power by sanctions -- similar to those imposed in Federal Courts in the US.

c) Creation of an institution of Justices of the Peace and expanding the role of alternative dispute resolution. This is expected to ease the workload of the courts of general jurisdiction by approximately 60%. Chief Justice Lebedev strongly encourages the creation of this institution believing that justices of the peace will help promote the quality of justice and reintroduce the lost prestige of and respect for the courts as an institution of government in the general population. Creation of the institution of justices of the peace by the districts, which will not necessarily correspond to the administrative divisions of the Russian Federation's subjects (the local autonomies), will further promote the concept of the judiciary as an independent branch of power and avoid its dependence upon the other two branches. JOP will also help promote development of alternative methods of dispute resolution such as arbitration, mediation, etc

d) Continuing education of judges. Continuing education of judges via seminars and lectures is a key element of RLR as this will ensure that each judge is thoroughly familiar with the new legislation and will promote better application thereof. It must be emphasized that the direct interaction with judges of different levels, according them the opportunity to receive an instantaneous answer to a specific question, significantly aides in promoting progressive opinions and effectively promotes more successful implementation of judicial reform. Equally important, this will promote self-realization of judges as independent representatives of a separate branch of power, which in turn will help fostering of a different, more deferential attitude towards the judges from other branches of power and from the population at large.

e) Enlistment of mass media support and education of the general population of the advantages of legal/judicial reform through press exposure. Effective public information undertaking is vital to the ultimate success of RLR. The importance of such a campaign lies in four critical components: overcoming public apathy and traditional belief that no real change is possible; enlisting public support for real structural changes and public participation in making RLR a reality; ensuring that the RLR process is not secret --a regrettable component of many such undertakings which has hampered tangible and bona fide advancement or fundamental changes; persuading the Russian and international legal communities that real reforms are not only possible but are viewed by those who implement them as inseparable from the overall success of Russia in her transition to a market economy and integration into the World economic and legal communities;  overcoming the regrettable, universally held perception that the taint of corruption is a "necessary element" of any Russian reform initiative. Leading representatives of the Russian-American print and broadcast media, including Vladimir Pozner, Maria Berdnikova, Anna Tokmakoff and Emilia Topol expressed their unequivocal support and agreed to work closely with the project in ensuring proper airing of RLR by the mass-media on a frequent contemporaneous basis. It is also important to ensure regular public appearances (interviews, opinions, editorials) of leaders of the project as well as Government leaders and foreign donor organizations in print and broadcast programs dealing with legal and judicial reform. The opening of "Russian Legal Reform" Internet site in Russian and English is also viewed as a key element of promoting public awareness and participation in RLR.

f) Securing of solid financial backing of the Russian Government in the form of a fixed and guaranteed federal budget for administrative support of judicial activity. Securing a guaranteed fixed Federal budget for RLR is critical for two reasons. First and most obvious is that RLR may not be seriously addressed while the normal activity of the entire Russian judicial apparatus is undermined because judges are not paid salaries on time, courts are short of such basic items as office supplies, court buildings are in dire need of repair etc. Here it is also important to underscore that financing must come specifically from the federal budget and be channeled through the JD in order to avoid dependency on local budgets of Russian Federation subjects. At present, starting with January of 1999, the direct federal financing commenced. The second, equally important point is that by providing the necessary budget, the Russian Federal Government will demonstrate its commitment to RLR. <RLR/ADV.NOTE><05/07/99>


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RELEASE / ADVISORY NOTE / March 10, 1999



     Effective public information undertaking is vital to the ultimate success of real reform, if we are to view "the Russian Legal Reform" as anything more than a string of superficial alterations or a device to secure funding from international donors. The importance of such campaign lies in four critical components:

     1. Overcoming public apathy and traditional belief that no real changes possible; enlisting public support for real structural changes and public participation in making the reform a reality.

     2. Insuring that the legal reform process is not conducted in secrecy - a regrettable component of many such undertakings, which hampered tangible and bona fide advancement or fundamental changes.

     3. Persuading the Russian and international legal community that real reforms are not only possible but are viewed by those who implement them as inseparable from the overall success of Russia in her transition to market economy and integration into the World economic and legal communities.

     4. Overcoming regrettable, universally held perception of taint of corruption is a "necessary element" of any Russian reform initiative.


     In order to insure proper reflection of legal reform project by mass-media, concrete steps must be taken involving Russian media as well as Russian language media in the US in the process. These steps should include:

     - Identifying specific media organizations which are not controlled by any particular interest groups and are capable of delivering objective and accurate information regarding the progress of every aspect of the legal reform process. At the outset, such should definitely include Kommersant-Daily (as well as Kommersant-Money), MK, TV-6, "New York-New York", WMNB, Russian Daily and Russian regional broadcast and print media.

     - Establishment of a permanent public information center which would work closely with the representatives of the press in keeping them informed on frequent contemporaneous basis, via news releases, briefings and press-conferences.

     - Regular public appearances (interviews, opinions, editorials of the leaders of the project, as well as Government leaders and foreign donor organizations in print media and on broadcast programs dealing with legal and judicial reform.

     - Opening of "Russian Legal Reform" Internet site in Russian and English and have it updated with news and developments on a daily basis.

     - ARLI has begun the campaign with regular appearances of our experts on US-Russian law in print and broadcast media.  

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The first official English language reference source of Russian commercial laws

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Compiled, translated and codified by the staff of American Russian Law Institute: Emanuel E. Zeltser, Esq., Anna Reid, LL.M., LL.D., and Alexander Fishkin, LL.D. , together with the Academy of Jurisprudence of the Ministry of Justice of Russia, and professors of the Law School of the University of Pittsburgh


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Statement of Emanuel Zeltser, Director and General Counsel of ARLI September 29, 1999, Hearing of the House Committee on Banking and Financial Services on the Bank of New York Russian Organized Crime and Money Laundering Matters











































































































































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