SPRING STATE DUMA SESSION OFF TO SLOW START

UNCLAS SECTION 01 OF 03 MOSCOW 001445 SIPDIS SENSITIVE SIPDIS E.O. 12958: N/A TAGS: PGOV EAGR EFIN ENRG ETRD PREL PHUM SOCI RS SUBJECT: SPRING STATE DUMA SESSION OFF TO SLOW START ¶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. END SUMMARY. . GRYZLOV,S PRIORITIES -------------- ¶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. . INITIAL RESULTS DISAPPOINTING -------------- ¶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 sessions. . LEGISLATIVE GOALS FOR SPRING 2006 -------------- ¶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 Profession"; -- 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. . POTENTIALLY TROUBLESOME BILLS -------------- ¶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 country. ¶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. . OPPOSITION NOT GIVING UP -------------- ¶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. . GOVERNMENT HOUR SPEAKERS -------------- ¶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. . COMMENT -------------- ¶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. BURNS