First Deputy Minister for Property Relations Alexander Braverman today announced at a post-government session briefing that the government had approved a draft law "On the conversion of property in the possession of citizens or legal entities to Russian Federation property." According to Braverman, the sole ground for converting a citizen's property would be if it were defence or security-related. However, this would not be the only condition, he explained, as the state will have to establish whether it could acquire the necessary property on the open market.
He reported that the bill was based in four main principles. Nationalisation can only be applied to facilities of strategic importance for the defence and security-related sphere. Nationalisation will be carried out according to the reimbursement principle, with preliminary and adequate settlements for the losses incurred by the property's owner. Moreover, nationalisation expenses will be included in a secret federal budget article. Finally, nationalisation should not be a form of punishment, Braverman said.
According to him, the bill safeguards the interests of both the property owner and the state, as an independent evaluator will estimate the property's price, while the payment will be made in a lump sum without any delays. Furthermore, the first deputy minister said that owners could take their case to court in the event of a dispute.
Braverman sought to allay investors' fears concerning the broad term "strategic production." "A clear definition of the given notion is contained in the law on defence and security," he said. He added that government representatives would not widen the scope of this term, but would work out strict criteria for it.
Braverman stressed that the bill was balanced and would facilitate improvements in the country's investment climate. He also said that the bill would be submitted to the State Duma in two to three weeks.