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Vedomosti, September 29, 2003

President Putin: It's a Good Idea, It's a Correct Idea
Vladimir Putin has no objections to an amnesty for capital

By Vitaly Ivanov and Alexander Bekker

While in the United States, President Vladimir Putin again spoke out against renationalisation and approved of the idea of an amnesty for capital. The Russian tax authorities had criticised this idea in spring. Putin met teachers and students of the University of Columbia on September 26. The Russian President was asked about his attitude to "plans for renationalisation or... proposals... announced by Grigory Yavlinsky".

The Financial Times published Grigory Yavlinsky's article "Reforms, That Corrupted Russia" on September 2 2003. The YABLOKO leader set out some proposals regarding the transformation of Russian capitalism. In particular, Yavlinsky proposed the adoption of laws "on an amnesty for capital, a tax amnesty and total amnesty, except for murder and crimes against individuals". In addition, Yavlinsky stated that it would be advisable to bar people "who played an active role in privatisation processes" from politics for ten years.

President Putin assured the Americans that he opposed renationalisation and nationalisation. At the same time, the President noted that "the majority of the Russian population" consider the privatisation conducted in the 1990s as unfair. Putin noted that he had repeatedly "discussed the idea of an amnesty for capital with Grigory Yavlinsky": the President considers this idea to be "good and correct". However, the question is "how we should implement this idea correctly and competently, so that the public will agree with such a solution". The President promised: "If we find such a solution, we will do this."

Vladimir Putin emphasized the need to return the capital taken out of Russia. At a meeting of the Chamber of Commerce and Industry on June 19 he pointed out to business leaders that the West had stepped up "anti-laundering laws", and noted that Russia was a safe place for their money. He also met a member of the upper chamber of the Russian parliament Sergei Pugachyov, co-owner of Mezhprombank. The latter stated after the meeting that the President commissioned him to discuss the mechanism for returning Russian capital from offshore zones with representatives from the Russian Union of Industrialists and Entrepreneurs. However, no specific projects have been designed yet.

Representatives from the Presidential Administration and the government said that Putin had sent an order to prepare proposals regarding an amnesty for capital to ministries and departments in February or March. Officials say that the Finance Ministry, the Economic Development Ministry and the Tax Service opposed such plans. A high-ranking Finance Ministry official stated that plans to amnesty capital were suspended six months ago. The Economic Development Ministry refuses to comment on this topic saying that a medium-term development programme approved by the government makes no mention about an amnesty for capital.

However, Mikhail Barschevsky, a representative of the government in the Constitutional, Supreme and Supreme Arbitration Courts, hopes that "Putin will make verbal political and ideological statements in the form of a specific order to prepare corresponding bills". Barschevsky is convinced that "the Presidential Administration and the government have enough skilled lawyers and economists who would cope with such task in the shortest possible time".

Andrei Belousov, head of the Macroeconomic Situation and Forecasts Centre, thinks that a decision to amnesty capital would be a mistake, as "from macroeconomic viewpoint, it is inadvisable to speed up the return of capital at a time of a substantial inflow of hard currency into Russia". He noted that "Russia first must solve the issue of the legitimacy of property rights."

The leaders of business "trade unions" addressed President Putin on July 21, 2003, and presented a new social contract, which would reflect the state's obligations "regarding the results of privatisation" and "social and ethical obligations of business". Two days later the Union of Right-Wing Forces announced it was reviving the idea of amending Article 181 of the Civil Code, to reduce the statute of limitations for privatisation-related lawsuits from ten to three years. Boris Nadezhdin, Deputy Head of the Union of Right-Wing Forces faction, said that the main obstacle on the path to this amendment boils down to the position of the Presidential Administration. However, he noted that the "Kremlin's intention to support us is increasing every day".


See also:

Privatisation in Russia

Reforms that corrupted Russia. By Grigory Yavlinsky, Financial Times (UK), September 3, 2003.

Vedomosti, September 29, 2003

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