20 january 2011
Background material for the January 20, 2011 meeting of the Government of the Russian Federation (press release)
PRESS RELEASE*
The Russian Government plans to consider the following issues at its meeting scheduled for January 20, 2011:
1. The draft federal law On Amendments to the Federal Insolvency (Bankruptcy) Law and the Federal Judgment Execution Law to improve bankruptcy proceedings against strategically important corporate entities
The draft federal law was submitted by Russia’s Ministry of Economic Development.
The draft law aims to keep strategically important businesses afloat and to clarify the provisions of the Federal Insolvency (Bankruptcy) Law and the Federal Judgment Execution Law, which oversee the bankruptcy proceedings against such businesses.
In order to preclude the unwarranted and deliberate initiation of bankruptcy proceedings against indebted strategic businesses, the draft law specifies that an arbitration court may initiate bankruptcy proceedings against a strategically important corporate entity only if its creditors’ claims are more than five million roubles.
However, under the draft law, a strategic corporate entity may not be declared bankrupt and may not go into receivership unless the total of its creditors’ claims exceeds the value of the debtor’s non-core assets (which are not included in the debtor’s single production and technological complex) and claims.
In order to allow sectorial bodies to have a greater say in bankruptcy proceedings brought against strategic entities, the draft law specifies that the Russian government shall set a procedure for the federal executive bodies in charge of implementing a single government policy on a respective debtor’s activity to prepare their opinions about debtor property external management plans.
The draft law further offers to amend the manner in which the Russian Federation exercises its preemptive right to acquire a strategic entity.
Under the Federal Insolvency (Bankruptcy) Law, the Russian Federation may acquire a debtor’s business at a competitive bidding price within a month of the tender. The draft law specifies that following the assessment of the debtor’s assets, the administrator shall inform a respective body or state-run corporation in the sector of the asset price as determined by an independent valuator.
A respective body or state-run corporation in the sector may then exercise its preemptive right to acquire these assets within two months of receiving a valuator’s report and the results of an examination by a self-regulating organisation of valuators to which the aforementioned valuator belongs, as well as the opinion of a body authorised to issue opinions based on valuators’ reports.
When exercising its preemptive right to acquire the assets of federal state-run entities, the Russian Federation may give funds to the debtor in the amount equal to the value of the debtor’s assets as determined by an independent valuator. In this case the debtor’s assets shall be withdrawn from bankruptcy proceedings, and the funds given by the Russian Federation shall be added to the debtor’s assets.
Amendments to the Federal Judgment Execution Law proposed by the draft law hold bailiffs responsible for sending documents and information to a respective sectorial body or a state-run corporation within three days of the date of the asset seizure note issued to a strategically important entity.
2. The draft federal law On Amendments to Article 14 of the Civil Procedural Code of the Russian Federation and Article 30 of the Criminal Procedural Code of the Russian Federation.”
The draft law was submitted by Russia’s Ministry of Justice.
The European Council of Ministers’ recommendations “On the Independence, Effectiveness, and Role of Judges” read that case assignment shall not be influenced by the wishes of any party to the case or any persons interested in a court’s disposition of the case. Cases can be assigned using an automated assignment system or in any other manner.
The draft law provides for using information systems to expand the choice of legal options in forming a court proceeding, with due account of the judges’ load and specialisation, and to rule out the influence of any persons interested in the court decision – a measure that will strengthen the independence of judges.
For these purposes, appropriate amendments to the Civil Procedural Code and Criminal Procedural Code are hereby proposed.
In drafting the law, the developers were guided by the Development of the Russian Judicial System federal target programme for 2007 – 2012, which aims to make information and telecommunications technologies play a greater role in court practice, including creating more than 80,000 jobs and releasing adequate funding for providing the Supreme Court and courts of law with everything they need to have access to operative, full, and reliable information.
The draft law provisions regarding case assignment and court composition are optional, providing for both standard procedure, pursuant to Article 62 of the Federal Law On Judge Status in the Russian Federation, including at small courts, and the use of the automated system that is being introduced under the federal target programme.
Information systems such as Pravosudiye (Justice), a state-managed automated system, are planned to be used to promote the automated assignment of cases to judges as provided in the draft law.
The use of an information system to form a court proceeding shall be governed by the rules and regulations issued by the Supreme Court and the Law Department at the Supreme Court.
It should be noted that item 37 of the action plan laid down in the respective executive order of the government calls for provisions in the draft federal law that will regulate the issues of transparency of judge appointment and dismissal, as well as the advanced training of judges, including setting more stringent requirements for candidate judges and enhancing the effectiveness of the performance appraisal system developed for judges.
However, these issues have already been settled by adopting the following laws: the Federal Law On Constitutional Disciplinary Judgment; the Federal Law On Amendments to Articles 6 and 11 of the Federal Law On Judge Status in the Russian Federation and to Articles 17 and 19 of the Federal Law On Judge Community Bodies in the Russian Federation; and the Federal Law On Amendments to Article 201 of the Federal Law On Judge Status in the Russian Federation.
The issue of forming an arbitral tribunal using the automated information system at courts of arbitration has been settled following the adoption of the Federal Law On Amendments to the Arbitration Procedural Code of the Russian Federation.
3. The draft federal law On Amendments to Article 27 of the Federal Law On Higher and Postgraduate Vocational Education and Article 5 of the Federal Law On Science and Government Science and Engineering Policy
The draft federal law was submitted by Russia’s Ministry of Education and Science.
On August 2, 2009, Federal Law No. 217-FZ On Amendments to Certain Legislative Acts of the Russian Federation on Issues of Establishing Legal Entities by Government-Financed Research and Education Institutions to Implement the Results of Their Intellectual Activity was adopted. The law gives government-financed research and education institutions, as well as research or higher education institutions established by state academies of sciences, a right to set up legal entities to implement the results of their intellectual activity, contributing a right to use such results to the charter capitals of these legal entities.
Under Federal Law No. 217-FZ, research and education institutions reserve their exclusive rights and, after establishing a legal entity, may not assign their exclusive rights to other parties and shall remain right-holders for the term of the licence agreement.
However, in reality, the provision of Federal Law No. 217-FZ prohibiting a legal entity from assigning a right to use the results of intellectual activity to third parties under a contract or on any other grounds tends to impede the introduction of the results of intellectual activity, particularly of software and pharmaceutical products.
In order to remove this restraint, it is proposed to amend Article 27 of the Federal Law On Higher and Postgraduate Vocational Education and Article 5 of the Federal Law On Science and Government Science and Engineering Policy, namely to delete provisions prohibiting a legal entity from assigning a right to use the results of intellectual activity to third parties under a contract or on any other grounds.
At the same time, the provision reserving the exclusive rights of research and education institutions to the results of intellectual activity remains unchanged.
4. The draft federal law On Amendments to the Federal Law On Drug and Psychotropic Substance Control to improve the control over the precursors of drugs and psychotropic substances
The draft law was submitted by the Federal Drug Control Service of the Russian Federation.
In order to better combat drug and psychotropic substance trafficking, it is necessary to put in place tight control over the trade of precursor substances used to make and process drugs.
The draft law provides for imposing a prohibition on the trade of precursor substances used in illegal drug laboratories and not intended for industrial use.
The draft law proposes to amend the Federal Law On Drug and Psychotropic Substance Control by including the category “Precursors” on the list of drugs, psychotropic substances, and their precursors subject to control in the Russian Federation, Section 1, under which such precursors are prohibited and can be used only for scientific and educational purposes in expert judgement (provided an appropriate licence has been issued) and in investigative and search operations. It is further proposed that measures to control the buying and selling of drugs and psychotropic substances included in Section 1 should also apply to precursors included in the same section.
5. The submission of the Statute on the Court of the Eurasian Economic Community to the President of the Russian Federation for the purpose of submitting the same for ratification
The draft resolution was submitted by Russia’s Foreign Ministry.
The Statute on the Court of the Eurasian Economic Community determines the structure and the composition of the Court, the procedure for appointing and dismissing judges, their powers, as well as the privileges and immunity of judges, executive officers, and employees of the EurAsEC Court Office; specifies the terms for providing funding for Court activities and the venue of the Court; and lays down the Court’s terms of reference and the mechanism of court proceedings.
The EurAsEC Interstate Council at the head of state level has pledged to ratify the EurAsEC Court Statute before May 1, 2011.
6. The submission of the Treaty on the Delimitation of Maritime Boundaries and Cooperation in the Barents Sea and the Arctic Ocean Between the Russian Federation and the Kingdom of Norway to the President of the Russian Federation for the purpose of submitting the same for ratification
The draft resolution was submitted by Russia’s Foreign Ministry.
The Treaty determines the maritime boundary between Russia and Norway in the Barents Sea and the Arctic Sea, which begins at the end point specified in the Treaty on the Delimitation of Maritime Boundaries in the Area of Varanger Fjord Between the Russian Federation and the Kingdom of Norway, dated July 11, 2007, and after passing through a series of geodesic lines, reaches a point on the line connecting the extreme points of the external boundary of the continental shelf of the Russian Federation and the Kingdom of Norway.
Article 4 of the Treaty and Appendix I lay down the terms of the two countries’ cooperation in fishing and, in particular, a key provision that delimitation shall not worsen the fishing conditions for Russia or Norway. Guided by this provision, the two parties have maintained the mechanism of joint regulation of fisheries in the Barents Sea set forth in the bilateral agreements of 1975 and 1976, the terms of which will be extended for another 15 years as soon as this Treaty goes into effect and could be further extended in six-year terms.
The Joint Russian-Norwegian Fishery Commission will continue to operate as a fishery regulator in the Barents Sea. In addition, a two-year transition period is provided in the Treaty after it comes into effect, during which time Russian technical rules will apply to fishing vessels that navigate in the Norwegian economic zone within the currently disputed area while flying the Russian flag.
Pursuant to subparagraph c) paragraph 1 and paragraph 2 of Article 15 of the Federal Law On International Treaties of the Russian Federation, the above Treaty is subject to ratification.
7. Amendments to Russian Government Resolution No. 338, dated July 5, 2004
The draft resolution was submitted by Russia’s Ministry of Finance.
The draft resolution provides for amending the Government Resolution On Measures to Implement the Federal Lottery Law, by expanding the functions performed by Russia’s Ministry of Finance and Federal Taxation Service.
Under the draft resolution, the Ministry of Finance shall be authorised to approve the procedures for keeping a single state registry of lottery equipment, as well as for determining what data shall be included in an annual lottery report and its publication procedure.
Furthermore, the Ministry of Finance will be responsible for developing government policy and rules to regulate lottery activities and also for providing federal and local executive bodies with the respective methodology.
The Federal Taxation Service is authorised to keep a single state registry of lottery equipment, register lottery equipment in keeping with the established procedure, and check that lottery equipment conforms to the appropriate specifications.
8. Amendments to subparagraph 5.6.7 on the Statute on the Ministry of Agriculture of the Russian Federation
The draft resolution was submitted by Russia’s Ministry of Agriculture.
The ministry shall keep a state herd record and a state herd register, pursuant to paragraph 5.6.5 of the Statute.
The Ministry shall also keep veterinary, pedigree stock-breeding, seed farming, and land fertility inventories and registers, pursuant to paragraph 5.6.7 of the Statute.
Since keeping the pedigree stock-breeding inventory and register alongside the state herd-register is tantamount to a redundancy in the Ministry’s powers, the draft resolution aims to eliminate it.
9. Disaster relief to victims and family members of those killed in the terror attack in the city of Khasavyurt (the Republic of Dagestan) on January 14, 2011.
Thirteen people were killed or injured as a result of a terror attack in the city of Khasavyurt on January 14, 2011(according to information released by Russia’s Health Ministry at 8:00 a.m. on January 15, 2011): three died, six were badly injured, and four were treated for minor injuries in out-patient clinics.
Pursuant to paragraph 10 of the Rules governing allocation of funds from the Russian government’s reserve to prevent and deal with emergencies situations and the effects of natural disasters, funds are allocated to pay for damages to physical and legal entities that have suffered due to terror attack and to cover expenses for financing a number of measures, including the payment of one-time benefits to:
Moscow,
January 19, 2011
* Press releases issued by the Press Service and Information Department contain materials submitted by federal executive bodies to the government of the Russian Federation for discussion.
