The evolution of Russian legal reforms: Where to next?

As a legal heir to the Soviet Union, the new Russia inherited not only its international status, nuclear weapons, and its diplomatic rights and obligations, but also its legal system. The latter proved to be one of the hardest to change, as the often complex and controversial development of the country’s political and economic climate undoubtedly affected the development of the legal system. Yet, despite multiple setbacks and obstacles, Russia’s rule of law is evolving at a rather fast pace and is gradually moving towards the world’s best practices.

Four formative stages of Russia’s legal evolution

There have been at least four formative periods of Russian legal reforms:

• The first period, starting with the fall of the Soviet Union, could be classified as the post-Soviet legal scramble. During this period, the government passed thousands of laws and decrees in order to adapt Soviet legacy to new conditions. This process ended by the new millennium with the passage of all major codified laws (civil, criminal, arbitration (commercial), tax, and other).
• The second period took place between the late 1990s and mid-2000s. During this time, Russia became familiar with the new codes as law schools brought up a new generation of young lawyers and the legislative branch amended previously passed laws to make them more detailed and nuanced for the country.
• The third period, starting in mid-2000s, was characterized by the increased activity of the courts and an accumulation of court rulings that started shaping the legal landscape of Russia as much as the codes and laws on the books. While in the late 1990s, a judge often had to rely only on the law itself, a decade later extensive court precedents already existed behind every article in every law.
• Finally, the fourth period, which started in the late 2000s, is probably the most important in recent legal history. During this ongoing period the accumulated critical mass of legal practice and court rulings is paving the way towards a shift from the Continental, codified law-based system to the Anglo-Saxon, precedent-based system. More can be read about this shift here.
  

Next steps in Russia’s legal reform agenda

Moving forward, there exists a broad consensus on the need for more change in the judicial system and legislation, especially in light of Russia’s efforts to modernize and attract greater foreign investment. In the last year we have witnessed an increase in public discourse on this topic.   The following are several pressing Russian legal reforms on the agenda that Russians and foreign investors alike should watch for:

• The Ministry of Internal Affairs (MVD) reform is one of the most publicized efforts currently underway in Russia. While not specifically a judiciary reform, it will have a profound impact on law enforcement and the fight against corruption. Russia’s police will operate under clear guidelines that will make the MVD more transparent and its officers more accountable for their actions and respective of citizens’ rights. Furthermore, the police force, which up until now has been called “militia,” will from now on be officially called “police.”
• Law on Education has also sparked debates in the country. Russia has yet to decide what features to retain from the Soviet educational system and how far it is ready to gravitate towards the Western model. New educational standards will have a profound effect on Russia’s labor force within a generation.
• The country’s Law on Subsoil Resources was written back in 1992. With thousands of amendments, it is not a document investors in Russia’s mineral wealth would like to work with.  As the Russian economy modernizes, it will need a new law on the books. If one is not adopted soon, precedents may shape commercial relations in the sector.
• Public disclosure guidelines for JSCs (OAOs), particularly with state participation and state corporations, remain unclear in Russia. However, the recent victory of minority shareholder Alexei Navalny against Rosneft Oil Company disclosure rules in the Constitutional Court paves the way towards greater transparency in state-held enterprises.
• Liberalization of Russia’s Criminal Code is underway. There are hundreds of initiatives in the works, including such important ones as limiting pre-trial detention for non-violent and economic crimes, and decriminalization of certain insignificant and non-violent offences. 
• There are a growing number of rulings in taxation and anti-monopoly disputes. The Federal Antimonopoly Service is a powerful regulator in Russia as it is in Western countries, and companies operating in Russia are learning to work with it and play by the rules.
• A few other recent important legal initiatives include new copyright and intellectual property laws, mandatory property and car insurance, migration procedures for expatriates, and many others.

Russia certainly has a ways to go in its legal reform efforts and it is clear that change is not possible overnight.  However, the country has done much so far to fill the post-Soviet legal vacuum, and the government and public alike are ensuring that this effort continues.

Igor Danchenko is a Washington, D.C.-based independent consultant and Russia-trained lawyer with advanced degrees in political science and regional studies.  He has extensive industry and research experience related to Russia and Eurasia, and served as Senior Research Analyst at the Brookings Institution in Washington, D.C. from 2005-2010. For more information, see http://www.linkedin.com/pub/igor-danchenko/3/993/332/.