Russians get the right to buy land

tony at tony at
Tue Oct 30 14:20:37 GMT 2001

Russians get the right to buy land,4273,4286350,00.html
Kevin O'Flynn in Moscow Guardian

Saturday October 27, 2001

Russia said goodbye yesterday to a huge remnant of the Soviet era when 
President Vladimir Putin signed into law a code that will make it 
legal to own land.

The code will allow Russians and foreigners to buy commercial and 
residential land (farmland is excluded). The Kremlin says this will 
hasten economic reform and attract more foreign investment. Critics 
say it will allow rich businessmen to buy up the country on the cheap.

Though Russians have been able to buy property since the breakup of 
the Soviet Union 10 years ago, they have not been able to buy the land 
it is built on.

Attempts to adopt a similar land code in another former Soviet state, 
Ukraine, led to Communist MPs storming out of parliament yesterday in 
protest at what they said was a rigged vote, Reuters reported from 

The Ukrainian Communists said they would appeal to the constitutional 
court about the bill, voted through by a slim majority on Thursday.

There has been no law allowing the sale of land in Russia since the 
Bolsheviks nationalised everything after seizing power in 1917.

But there have been unofficial sales of land, and the Russian 
government estimates that these cost it between £700m and £1.4bn a 
year in lost taxes.

Sales are expected to begin in a month once a system to determine land 
values is worked out - but this timescale could prove optimistic.

The code, which applies to commercial and residential land only - a 
mere 2% of the total in Russia - is likely to produce a buying and 
selling spree and help provide investment for many businesses.

Without owning the properties they live and work in, Russians have 
found it almost impossible to provide collateral to borrow from banks.

Attempts at land reform began seven years ago and have been marked by 

As in the Ukraine, fights broke out between deputies in Russia's 
parliament, the duma, earlier this year when the code was debated. 
Many ordinary people are afraid that the land sale will go the same 
way as the mass privatisations of the 1990s, which saw Russia's prime 
assets sold off to a few politically connected insiders.

Farmland, which makes up the majority of Russia's land, is not yet for 
sale: a revolt in the duma in June forced the government to drop 
attempts to privatise agricultural land. But a separate bill is meant 
to reach the duma within months.

· A Swiss magistrate has recommended that a case in which a former 
Kremlin adviser, Pavel Borodin, is accused of money laundering, should 
move to trial, it was announced yesterday.

Mr Borodin, an aide to Boris Yeltsin when the latter was president, 
was charged last April with laundering up to £21m in connection with 
contracts for two Swiss-based construction companies. He denies the 

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