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The Civil Code of the Russian Federation
By Sato Takaaki
Senior Research Fellow, Russian Department, East Asia Economic Law Office, Lecturer, Nishogakusha University

For the Russian Federation, economic reform is the most important of all social reforms. There seems to be no doubt that the collapse of the U. S. S. R. was triggered in part by economic problems. Even though the political system has changed from a socialist republic to a federation, people are still groping its way toward a market economy. In order to slough off an economy based on planned socialism economy and to enable the establishment of a market economy, a number of laws have been enacted. Of these, the Civil Code is the most important. Three sections were planned. The first was enacted in October of 1994 and put into practice in January of 1995. The second section was enacted December of 1995 and became effective in March of 1996. The third section is presently being written. The first and second sections of the Civil Code consists of four parts, sixty chapters and 1109 articles. The first section is comprised of fundamental provisions, corporation law, contract law, property rights, obligatory rights, etc. The second section is devoted to trade law, transportation law, laws relating to finance, etc. These rights, which were never granted under the socialism regime, are now guaranteed by law. These reforms are evidence that Russia is well on the road to democratization. Noted below are some of the key aspects of the Civil Code.


The Seven Fundamental Principles (Article 1):
  1. Equal justice for all guaranteed under civil law
  2. Inviolability of private property
  3. Freedom of contract
  4. Prohibition on interference in private activities
  5. Free exercise of civil rights
  6. Guarantee of civil rights
  7. Judicial protection of civil rights
These principles are similar to those adopted by modern western countries as they moved into a market economy. As such, they are important to the reformation of the economy of the Russian Federation.


The Rights of the Individual (Articles 17 through 47)
Guarantee of human rights is regarded as a very important theme in the Civil Code. During the U. S. S. R. era, individual ownership was severely restricted. Such restrictions no longer exist and these rights are specified in Articles 17 through 47. These articles guarantee individual property right, freedom of participation in credit-debt relationship, freedom of commercial activities, freedom of artistic expression, etc.


The Rights of Ownership ( Articles 209 through 306)
Private ownership, public ownership, state ownership and all other kinds of ownership are guaranteed and include the rights to possession, utilization, transfer and dispossession. The right of ownership is extended to a citizen, a juristic person, the Russian Federation and local governments. Foreigners, both natural persons and juristic persons, can also own real estate such as land and buildings. Everyone must register property ownership in accordance with the Real Property Right Registration Law. Private ownership of agricultural land is not currently granted, however a new Land Code is under discussion in the Federal Parliament.


Rights of Corporate Bodies (Articles 48 through 123)
The Civil Code puts legal entities into two categories: for-profit and not-for-profit organizations. For-profit organizations are subdivided into two categories: economic associations and economic companies. Economic companies have two divisions: unlimited partnerships and limited partnerships. There are three types of economic associations: stock companies, limited liability companies and supplemented societies.

Not-for-profit organizations include consumer cooperatives, social organizations, religious organizations, institutions, funds, associations, unions, etc. Consumers' cooperatives are composed of juristic persons and natural persons. There are also production cooperatives which are similar to consumer cooperatives but are for-profit. Social organizations include political parties, labor unions, artists' organizations and the like, all controlled by a special law. Funds are comparatively new entities in the Russian Federation. They are rumored to be used by rising financial tycoons in order to hide their assets, even though they are called non-profit organizations. Most institutions are state-owned companies and self-governing companies. Their profits are very small, hence they are called "institutions".

Some types of industries are required to have a license (special permission) to conduct business. For example, juristic persons who operating businesses such as banks, stock brokerages, insurance companies, medical treatment facilities and construction, transportation and media organizations, as well as those which use underground resources, must obtain licenses. Also, juristic persons must also register with the Ministry of Justice or with the local government.

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