July 15th, 2013

The amnesty won’t change business climate in Russia

In the past session the State Duma passed an amnesty for economic crimes. According to the President’s representative in the lower house up to 3,000 could be affected by the amnesty. The amnesty was much anticipated but fell short of expectations.

Soon after the State Duma passed the amnesty, Sergei Magnitsky was declared guilty in an unprecedented post-mortem trial

The amnesty could have demonstrated how serious the government was about the improving the investment climate. Entrepreneurial activity in Russia could have been much higher if business believed in the rule of law. Alas, success in Putin’s Russia often leads to prison. When a business becomes large and profitable it appears at the radar of siloviki – a network of corrupted policemen, investigators, prosecutors, judges and government officials. Since the YUKOS case, the first full-scale expropriation of business in modern Russia, many thousands of businessmen became victims of unlawful attacks by well-coordinated members of the juridical system. As a result, society lost trust in the country’s legal system. It seems almost impossible to separate criminals from innocent businessmen. That’s why the amnesty was needed.

The amnesty would have improved the investment climate if it were the first step of decriminalizing of entrepreneurial activity. The amnesty law doesn’t include two articles (159 and 160) of Russia’s Criminal Code that are most often used against businessmen, Navalny and Khodorkovsky among them. It means that the falsified trial against Alexei Navalny will continue and Mikhail Khodorkovsky will stay in prison. Only three hundred people will be released from prisons. To counterbalance any symbolic effect of the amnesty, late Sergei Magnitsky was declared guilty in an unprecedented post-mortem trial.

By this amnesty Putin demonstrates that he is not willing to admit any wrong doing of his clan. The lack of flexibility of the current regime leaves no chances for modernization and faster economic growth.


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