1. SUMMARY. WITH ONLY TWO WEEKS TO GO BEFORE IT ADJOURNS FOR A TWO-MONTH SUMMER RECESS, THE DUMA IS SCHEDULED TO CONSIDER A LARGE NUMBER OF CRITICAL ECONOMIC LAWS, INCLUDING THE LAND CODE, TAX REFORMS, AND A LAW ON JOINT STOCK COMPANIES. NOTABLY ABSENT FROM THE DUMA'S DOCKET ARE THE RATIFICATION OF THE U.S.-RUSSIA BILATERAL INVESTMENT TREATY, THE DRAFT 1996 BUDGET, AND THE TAX CODE. THE LATTER TWO DRAFT LAWS ARE BEING REVISED BY GOVERNMENT OFFICIALS AND WILL PROBABLY NOT BE TAKEN UP UNTIL THE DUMA RETURNS FROM ITS SUMMER RECESS IN OCTOBER. THE PUSH TO DEAL WITH THE REMAINING LEGISLATION ON THE DUMA'S SCHEDULE BEFORE THE END OF THIS MONTH IS PARTICULARLY PRESSING GIVEN THE UPCOMING WINTER ELECTIONS, WHICH WILL TAKE UP MUCH OF THE DEPUTIES' TIME AND ATTENTION THIS FALL AND INEVITABLY SLOW THE LEGISLATIVE PROCESS. END SUMMARY.
2. THE STATE DUMA IS SCHEDULED TO CONSIDER A LARGE NUMBER OF DRAFT LAWS, INCLUDING SEVERAL SIGNIFICANT PIECES OF ECONOMIC LEGISLATION, OVER THE NEXT THREE WEEKS BEFORE IT ADJOURNS ON JULY 21 FOR A TWO-MONTH RECESS. ANY LEGISLATION THAT FAILS TO MOVE FORWARD THIS MONTH COULD FACE SIGNIFICANT DELAYS IN THE FALL, WHEN DEPUTIES WILL BE INCREASINGLY CAUGHT UP IN PREPARATIONS FOR THE DECEMBER LEGISLATIVE ELECTIONS.
NO BUDGET OR TAX CODE TO FIGHT OVER UNTIL THE FALL
3. TWO OF THE MOST IMPORTANT ECONOMIC ISSUES THAT THE DUMA WAS ORIGINALLY SCHEDULED TO START DELIBERATION ON THIS MONTH, THE DRAFT FEDERAL BUDGET FOR 1996 AND THE TAX CODE, WILL NOT BE ON THE AGENDA AT ALL. THE GOVERNMENT HAD ORIGINALLY PLANNED TO SUBMIT THE 1996 BUDGET TO THE DUMA IN THE BEGINNING OF JULY WITH THE AIM OF SECURING ITS PASSAGE BEFORE THE SUMMER BREAK. THIS WEEK, HOWEVER, FINANCE MINISTER PANSKOV STATED IN THE PRESS THAT THE BUDGET NEEDS FURTHER REVISIONS AND MAY NOT BE READY FOR THE DUMA UNTIL MID-JULY. NEVERTHELESS, PANSKOV SAID THAT THE GOVERNMENT WAS CONFIDENT THAT THE BUDGET WOULD BE PASSED BY THE END OF THE YEAR. THE OUTLOOK FOR THE TAX CODE IS LESS CERTAIN. CHAIRMAN OF THE DUMA BUDGET COMMITTEE ZADORNOV TOLD US THAT THE LEGISLATURE WILL ONLY BEGIN TO DISCUSS THE TAX CODE THIS FALL. MOREOVER, CITING THE DUMA'S EXPECTED REORGANIZATION NEXT SPRING FOLLOWING THE DECEMBER ELECTIONS, ZADORNOV ESTIMATED THAT THE TAX CODE WOULD NOT BE APPROVED UNTIL NEXT FALL AND WOULD NOT BE IMPLEMENTED UNTIL 1997. A SENIOR FINANCE MINISTRY OFFICIAL AGREED WITH THIS TIMETABLE.
4. WITH THE CONTENTIOUS BUDGET ISSUE OUT OF THE WAY, THE DEPUTIES MAY HAVE MORE SUCCESS IN DEALING WITH OTHER IMPORTANT ECONOMIC LEGISLATION THAT WILL BE PRESENTED TO THEM THIS MONTH. BELOW ARE SEVERAL OF THE MOST IMPORTANT PIECES OF ECONOMIC LEGISLATION THAT THE DUMA IS SCHEDULED TO CONSIDER IN JULY.
DUMA HAS A FULL PLATE OF ECONOMIC LEGISLATION
5. LAND LEGISLATION. A REVISED LAND CODE IS SCHEDULED FOR A FIRST READING IN THE DUMA ON JULY 12. THE PREVIOUS VERSION OF THE CODE WAS SHOT DOWN IN JUNE FOR THE THIRD TIME SINCE AN INITIAL ATTEMPT TO SUBMIT THE BILL WAS MADE LAST SUMMER. AN UNLIKELY ALLIANCE OF RUSSIA'S CHOICE DEPUTIES, WHO ARE PUSHING FOR FEWER RESTRICTIONS ON LAND SALES, AND THE COMMUNISTS, WHO OPPOSE ANY LAND SALES AT ALL, "JOINED" FORCES LAST MONTH TO KILL THE LEG ISLATION AND MAY IMPEDE PROGRESS ON THE LATEST VERSION AS WELL.
6. ENERGY LEGISLATION. THE LAW ON OIL AND GAS IS SCHEDULED TO FACE ITS SECOND READING IN THE DUMA ON JULY 12. THE LEGISLATION DOES NOT APPEAR TO BE A FRONT-BURNER ISSUE FOR U.S. FIRMS. AN EARLIER VERSION WOULD HAVE SEPARATED LICENSING AUTHORITY FOR OIL AND GAS DEVELOPMENT AWAY FROM THE RUSSIAN MINERALS COMMITTEE (ROSKOMNEDRA), BUT IT FAILED TO PASS ITS SECOND READING IN JANUARY. OTHER ENERGY LEGISLATION THIS MONTH INCLUDES THE LAW ON ENERGY SAVING, WHICH WILL HAVE ITS FIRST READING ON JULY 12, AND THE LAW ON THE CONTINENTAL SHELF, WHICH IS SCHEDULED FOR A SECOND READING ON JULY 19. THE LATTER WOULD PROVIDE THE LEGAL FOUNDATION FOR OFF-SHORE OIL AND GAS PROJECTS.
7. SOCIAL LEGISLATION. THE LAW ON MINIMUM WAGES WAS SENT BACK TO THE DUMA LAST MONTH AFTER BEING REJECTED IN THE FEDERATION COUNCIL. IT IS CURRENTLY IN A RECONCILIATION COMMISSION AND WILL GO BEFORE THE FULL DUMA ON JULY 21, THE LAST POSSIBLE DAY. THE DRAFT LAW CALLS FOR BOOSTING THE MINIMUM WAGE, WHICH WOULD AUTOMATICALLY BOOST WAGES FOR PUBLIC SECTOR EMPLOYEES AND GOVERNMENT WELFARE AND UNEMPLOYMENT BENEFITS. CRITICS SAY THE INCREASED SPENDING WOULD BREAK THE FEDERAL BUDGET. TO EASE THE PRESSURE IN THE DUMA FOR SUCH LEGISLATION AND, AT THE SAME TIME, STRENGTHEN ITS STANDING BEFORE THE DECEMBER ELECTIONS, THE RUSSIAN GOVERNMENT HAS SUBMITTED DRAFT LEGISLATION TO USE EXCESS REVENUES IN THIS YEAR'S BUDGET FOR INCREASING SOCIAL SPENDING. THE FUNDS WOULD SPECIFICALLY BE USED TO BOOST MINIMUM WAGES AND SALARIES PAID THROUGH THE FEDERAL BUDGET TO KEEP THEM IN LINE WITH INFLATION.
8. LABOR LAWS. THE LABOR CODE FACES ITS SECOND READING ON JULY 12, WHILE THE 'STRIKE LAW' (OFFICIALLY, THE LAW ON REGULATING THE RESOLUTION OF COLLECTIVE WORKER DISPUTES) WILL FACE A SECOND READING ON JULY 17.
9. TAX LAWS. WHILE THE GOVERNMENT DOES NOT PLAN TO SUBMIT THE NEW TAX CODE UNTIL THIS FALL, THE DUMA IS EXPECTED TO PASS IN ITS THIRD READING A SERIES OF AMENDMENTS THAT ARE AIMED AT IMPROVING THE EXISTING TAX LAW. THE AMENDMENTS, WHICH WERE JOINTLY DRAFTED BY THE GOVERNMENT AND THE DUMA'S BUDGET COMMITTEE ADDRESS THE RIGHTS AND RESPONSIBILITIES OF TAXPAYERS AND TAX AGENTS, INCLUDING THE ISSUES OF TAX COLLECTION AND PENALTIES FOR LATE PAYMENTS.
10. INDUSTRY REGULATION. AMONG THE DRAFT LAWS THAT WILL AFFECT DOMESTIC INDUSTRIES ARE A REVISED LAW REGULATING NATURAL MONOPOLIES--THE ORIGINAL VERSION WAS REJECTED BY THE DUMA IN MAY--WHICH WILL FACE ITS FIRST READING ON JULY 19, AND THE LAW ON FINANCIAL INDUSTRIAL GROUPS, WHICH IS SCHEDULED FOR A FIRST READING THIS WEEK.
11. FINANCIAL LAWS. A SECOND READING OF THE DRAFT LAW ON CHANGES IN THE ACCOUNTING SYSTEM IS DUE ON JULY 14. THE LAW WOULD INTRODUCE A UNIFIED SYSTEM OF ACCOUNTING AND AUDITING TO RUSSIA, SIMILAR TO THE GAAP (GENERAL ACCOUNTING AND AUDITING PROCEDURES). IN ADDITION, THE DUMA IS ALSO SCHEDULED TO REVISIT THE LAW ON SECURITIES THIS MONTH. THE DRAFT LAW, WHICH WOULD ESTABLISH REGULATIONS FOR THE RUSSIAN SECURITIES MARKET AND OUTLINE THE FUNCTIONS OF THE SECURITIES COMMISSION, WAS REJECTED BY THE FEDERATION COUNCIL LAST MONTH. A RECONCILIATION COMMISSION IS EXPECTED TO PRESENT A REVISED VERSION TO THE DUMA FOR A VOTE BY JULY 11. AN EMBASSY CONTACT IN THE DUMA SAID HE WAS OPTIMISTIC THAT THE REVISED BILL WOULD BE APPROVED IN BOTH HOUSES AND WOULD BE SIGNED BY PRESIDENT YELTSIN IN EARLY AUGUST.
12. ANOTHER FINANCIAL LAW THAT WILL BE CONSIDERED IS THE LAW "ON BANKS AND BANKING ACTIVITY." AN EARLIER DRAFT WAS VETOED BY PRESIDENT YELTSIN, AND A REVISED VERSION IS SCHEDULED TO BE TAKEN UP TODAY (JULY 7) IN THE DUMA. EMBASSY SOURCES CLAIM THAT THE LATEST VERSION HAS THE APPROVAL OF THE LEGISLATURE AND THE EXECUTIVE BRANCHES AND SHOULD BE SIGNED INTO LAW IN AUGUST. THE OFFENDING LANGUAGE DISCRIMINATING AGAINST CHASE MANHATTAN BANK HAS BEEN REMOVED.
13. THE JOINT STOCK COM PANIES LAW (IN EFFECT, THE CORPORATE GOVERNANCE LEGISLATION), WHICH WAS PASSED IN ITS FIRST READING LAST MONTH, IS SCHEDULED TO FACE ITS SECOND READING JULY 21. RUSSIA'S CHOICE DEPUTY GREGORY TOMCHIN, WHO HEADS THE DUMA SUBCOMMITTEE THAT DRAFTED THE LAW, TOLD US THAT IT WAS THE PRODUCT OF EXTENSIVE COMPROMISE AND NOW HAS THE SUPPORT OF MOST DUMA FACTIONS, EXCEPT THE COMMUNISTS AND THE AGRARIANS. TOMCHIN THINKS ADOPTION OF THE JOINT STOCK COMPANIES LAW WILL BE ONE OF THE LAST MAJOR ACCOMPLISHMENTS OF THE DUMA THIS MONTH.
14. FOREIGN TRADE. FINALLY, THE DUMA'S ECONOMIC POLICY COMMITTEE WILL TRY TO REVISE THE FOREIGN TRADE BILL FOLLOWING YELTSIN'S VETO LAST MONTH. YELTSIN DID NOT SPECIFY HIS OBJECTIONS TO THE BILL, BUT KOMMERSANT DAILY SUGGESTS THAT THE GOVERNMENT OPPOSES LANGUAGE IN THE DRAFT THAT WOULD GIVE THE DUMA GREATER CONTROL OVER ARMS EXPORTS AND WOULD STRIP THE AUTHORITY OF THE MINISTRY OF FOREIGN ECONOMIC RELATIONS OVER EXPORTS OF RAW MATERIALS.
15. IN ALL, THE DUMA IS SCHEDULED TO CONSIDER OVER 170 PIECES OF LEGISLATION THIS MONTH. A NUMBER OF THESE DRAFT LAWS ARE AT AN EARLY STAGE IN THE LEGISLATIVE PROCESS AND ONLY REQUIRE THAT THE DUMA COUNCIL ASSIGN THEM A DATE, PROBABLY IN THE FALL, FOR A FIRST READING. SPEAKING TO DEPUTIES EARLIER THIS WEEK, PRIME MINSTER CHERNOMYRDIN SPELLED OUT WHAT HE CONSIDERS TO BE THE PRIORITY ISSUES, CITING THE 1996 BUDGET, THE TAX AND LAND CODES, AND THE JOINT STOCK COMPANIES LAW. THESE DRAFT LAWS, HOWEVER, DELVE INTO THE ECONOMIC ISSUES THAT ARE LIKELY TO BE THE FLASH POINTS IN THE UPCOMING LEGISLATIVE ELECTIONS AND WILL UNDOUBTEDLY SPARK SIGNIFICANT DEBATE.
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