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Reference ID Created Released Classification Origin
06MOSCOW1445 2006-02-15 12:03 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Moscow

DE RUEHMO #1445/01 0461203
R 151203Z FEB 06

E.O. 12958: N/A 
1. (SBU) SUMMARY. The spring semester of the Russian State 
Duma, which began on January 11 and will run through 
mid-June, got off to a slow start.  Deputies are burdened 
with almost 600 draft laws, with 52 designated as priority 
bills focusing on water and forestry regulation, 
transportation safety, use of personal information, and 
export controls.  However, in January, only 76 of the 111 
bills planned for consideration were addressed.  Upcoming 
bills that may stir controversy and delay the legislative 
process even further include those dealing with subsoil 
resources, counterterrorism, tax administration, entry 
regulations for foreigners, and protection of information. 
2. (U) The Duma began its spring session on January 11.  In 
remarks before the first plenary meeting, State Duma Speaker 
Boris Gryzlov encouraged deputies to finish the process of 
adopting laws passed in their first readings in the fall 
session and to focus on approving amendments and implementing 
legislation for laws already enacted.  He cited the example 
of the Housing Code, which was passed last year but which 
still lacked implementing legislation.  He stressed that the 
session would be "difficult and intensive" and that 
parliamentarians would have to work responsibly and with 
discipline.  Gryzlov said the Duma had a responsibility to 
use its parliamentary powers to monitor implementation of 
important laws passed in 2005 and coming into force in 2006, 
including those concerning social policy, special economic 
zones, NGOs, and strengthened state control over the 
distribution of alcoholic drinks.  He urged that the Duma be 
especially attentive to monitoring implementation of the 
federal budget and encouraged deputies to take the initiative 
in discussing options for improving the tax system.  The main 
aims should be decreasing the tax burden on manufacturers and 
improving tax collection efforts, Gryzlov added. 
3. (U) Despite Gryzlov's exhortations, the Duma leadership 
was disappointed by January's legislative accomplishments. 
Summarizing them, First Deputy Duma Chairman Lyubov Sliska 
mentioned that consideration of 35 bills scheduled for 
January (37% of the total 111 planned for the month) had been 
postponed.  In her opinion, the slow tempo of the deputies' 
work was unacceptable so soon into the spring session. 
However, she also directed criticism at the Government, 
pointing out that the Duma Council was still waiting for 
official opinions by the Government for over 80 bills sent to 
it more than two months ago.  "This situation is seriously 
hampering the legislative process, because it is not possible 
to submit a bill for consideration without the Government's 
official opinion," she said.  She encouraged the deputies and 
the Government to coordinate more effectively and be more 
diligent in introducing bills to the Duma Council and plenary 
4. (U) Apart from the opening session, the Duma has met in 
six plenary sessions.  During those sessions, deputies passed 
the bill on "Advertising" in the second reading, as well as 
amendments to laws on "Joint-Stock Companies" and "Banks and 
Banking Activity."  High priority bills currently under 
consideration include a draft on the Water Code and 
amendments to the Tax Code that would, among other things, 
increase the tax rate for gambling businesses operating slot 
machines.  In the second half of February the Duma plans to 
consider amendments to the law on "Trademarks, Service Marks, 
and Appellations of Origin," which will exclude the clause on 
reciprocal protection of specific appellations of origin 
registered in foreign countries in order to make Russian 
legislation consistent with WTO agreements on the trade 
aspects of intellectual property rights. 
5. (U) The Duma agenda also includes bills concerning 
implementation of President Putin's four National Projects 
(health care, education, housing construction, and the 
agro-industrial sector).  In addition, deputies will consider: 
-- changes to the Criminal, Criminal-Procedural, and 
Administrative Codes; 
-- amendments to the law on local self-government; 
-- amendments to the law on "Practicing Law and the Legal 
-- amendments to the law on the "Fishing Industry and 
Preserving Aquatic-Organic Resources"; 
MOSCOW 00001445  002 OF 003 
-- a bill on the "Use of Personal Information"; 
-- a bill on "Regulation of Export Controls"; 
-- ratification of the UN Convention against Corruption; and 
-- adoption of the UN Food and Agriculture Organization 
Charter. &#x
6. (U) One of the most criticized pieces of legislation 
during the fall session -- a counterterrorism bill that would 
give security services sweeping new powers to declare a state 
of emergency if they believed there was a "terrorist danger" 
-- will come up for a second reading in late February or 
early March.  The bill was drafted by the Federal Security 
Service, the Interior Ministry, the Prosecutor General's 
Office, and the Justice Ministry, and was approved in a first 
reading December 17, 2004.  It was drawn up in response to 
the 2004 Beslan school massacre, but is widely seen by human 
rights activists as an attack on civil liberties and an 
attempt to increase the powers of Kremlin officials. 
7. (U) In addition, the Duma plans to revise two laws 
concerning foreigners in Russia -- "Entry and Departure 
Procedures for Foreign Citizens" and the "Legal Status of 
Foreign Citizens in the RF."  The Committee for 
Constitutional Legislation, headed by Vladimir Pligin, 
drafted both measures.  About 100 amendments to the laws were 
passed in the first reading last April which, if enacted, 
would considerably expand the number of reasons for denying 
entry into Russia, as well as grant bureaucrats considerable 
leeway in making decisions on entry requests.  For example, a 
visa application could be denied if an applicant was believed 
to have committed "unfriendly actions" that "harmed the 
international image of Russia," or if he/she used "insulting 
language when referring to Russian national symbols, state 
leaders, state power structures, or historical, cultural, 
spiritual, and public values."  The current draft does not 
clearly define these terms.  The amendments would also deny 
entry to foreigners who "have caused Russia considerable 
material damage" or who "are considered dangerous," including 
those afflicted with an infectious disease.  On a more 
positive note, the Federal Migration Service intends to 
introduce a bill at the end of March that would allow 
foreigners to send registration papers by registered mail 
within three days of their arrival instead of applying for 
and obtaining registration documents in person.  A post 
office receipt would then serve as confirmation of 
registration.  Foreigners who fail to register would face 
fines and perhaps other penalties when they try to leave the 
8. (U) Another bill on the agenda is the revised text of the 
law on "Information, Information Technologies, and Protection 
of Information" that was initiated by the government and 
passed in its first reading last November.  According to 
independent Duma Deputy Vladimir Ryzhkov, the government 
could use such a law to assert control over the Internet. 
9. (U) According to the head of the Federation Council's 
Committee on Natural Resources and Environmental Protection, 
Viktor Orlov, the bill on "Subsoil Resources," which has been 
in the works since 2001, is unlikely to be approved by the 
summer and the government may even hold off on it for two to 
three years, introducing instead amendments to the existing 
legislation.  He said the current draft should regulate the 
distribution of mining licenses and stimulate more effective 
use of subsoil resources.  In its present form, Orlov said, 
the bill addressed only a fraction of the factors that hold 
back development and investment in subsoil exploration and 
mining.  Based on conversations with our energy sector 
contacts, the most problematic part of the bill pertains to 
language that would limit foreign company participation to a 
minority stake in "strategic" reserves.  Nevertheless, U.S. 
oil companies tell us that passage of the bill would add a 
measure of predictability to an otherwise very uncertain 
energy investment climate. 
10. (U) On February 22, the Duma plans to consider in a first 
reading draft amendments to the law on "Medicines" aimed at 
preventing unsanctioned use of confidential information 
presented to state authorities or other unscrupulous use of 
such data.  A second reading of additional amendments to the 
same law is scheduled for May.  These do not promote trade as 
they effectively ban the use of trademarks of 
pharmaceuticals, impose non-market pricing regulations, limit 
funding mechanisms for clinical trials, restrict import 
channels, and empower the government drug registration agency 
to cancel registration or require re-registration of drugs 
based on subjective grounds. 
MOSCOW 00001445  003 OF 003 
11. (U) In March deputies will discuss in the second and 
third readings a draft law intended to improve tax 
administration.  However, in spite of Putin's public call to 
"stop the tax terror," the draft approved in the first 
reading last year could potentially worsen the situation for 
taxpayers.  In particular, it would extend field tax 
inspections up to fifteen months and not establish a limit to 
the number of documents tax inspectors could require during 
inspections.  Deputies, together with businesspeople, drafted 
over a thousand amendments for the second reading, including 
provisions making tax officials criminally and/or 
administratively liable for abuse of office.  However, it 
remains unclear whether the pro-business amendments will get 
much of a hearing -- similar discussions in April-May 2005 
resulted in submission of a version drafted by the Finance 
Ministry that was approved in the first reading. 
12. (U) The second reading of Russia's revamped competition 
law is expected in March.  The current version has been 
reworked extensively since the Duma,s first reading last 
year; however, no details are available yet.  Officials are 
optimistic that the law will be adopted during the spring 
session but admit that the final reading may, in fact, drag 
into the fall session. 
13. (U) The opposition is gearing up to submit its own bills 
for the spring session, as well as offer its vision 
concerning the four National Projects.  Communists plan to 
submit an alternative bill for the national project on 
education and are working on legislation to increase child 
benefits and introduce a graduated income tax.  According to 
the Liberal Democratic Party (LDPR), four national projects 
are not enough -- party leader Vladimir Zhirinovskiy wants to 
propose additional projects on roads, on culture and science, 
and on reducing bureaucratization of the economy.  The LDPR 
also intends to introduce legislation to prevent the spread 
of avian flu in Russia and to push for establishment of a 
parliamentary commission that would make recommendations to 
Gazprom and the government concerning regulation of gas 
prices and exports. 
14. (U) The Rodina faction led by Sergey Baburin intends to 
propose two bills.  One
would provide state subsidies to 
young families, which would cost approximately 819 million 
rubles (USD 29 million).  The other would propose that Russia 
return to the Julian calendar, which Baburin claims would be 
more economically effective since it would add 13 working 
days to the year. 
15. (U) For the first time, the Duma has scheduled in advance 
all speakers for its weekly "Government Hour."  (In the past, 
speakers -- usually the prime minister or one of his cabinet 
ministers -- were requested a week in advance to report on 
issues they oversee.)  For example, Finance Minister Aleksey 
Kudrin will appear on March 22 to discuss implementation of 
the new benefits law, and Deputy Prime Minister and Defense 
Minister Sergey Ivanov will speak about plans for building up 
Russia's armed forces on May 24.  The last Cabinet members to 
appear before the Duma will be Foreign Minister Sergey Lavrov 
and Minister for Industry and Energy Viktor Khristenko, who 
will speak on June 7 and 14, respectively. 
16. (SBU) The Duma has before it an ambitious legislative 
agenda, including a handful of bills that will likely spark 
controversy, such as the subsoil bill and draft legislation 
regulating the entry of foreigners into Russia.  Whether the 
Duma will be able to make up for January's sluggish pace 
remains to be seen.  As for the outnumbered opposition's 
proposals, it is unlikely that they will make it onto such an 
ambitious agenda, especially given the dominant position and 
influence of the majority United Russia (YR) party. 
Meanwhile, YR will continue to coordinate its moves closely 
with the Presidential Administration and government.  As the 
Duma heads into the second half of its four-year term, we 
expect YR will continue to faithfully carry out Kremlin and 
government legislative initiatives relatively efficiently and 
without much debate, while the opposition minority, 
particularly independent deputies, will have little or no 
opportunity to push their own initiatives. 


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