Russia's New Reprivatization Law

The caption reads: IT WILL NO LONGER BE POSSIBLE TO MILK RUSSIA. RUSSIA HAS CUT OFF ALL CHANNELS FOR FREELOADER COUNTRIES.

While there’re many events to examine at the moment, I received a note today about a process that was mentioned several weeks ago in one of my Russian translations having to do with rectifying the wrongs committed during the privatizing period of the 1990s and those that happened later. The Constitutional Court’s decision on this issue will have important consequences that readers can infer as they read. This is a secondary source item that’s been composed from some primary sources that are unnamed. The author is The Kremlin Whisperer and the document he provides is located here. I’ll note that Dr. Hudson forwarded the document to me. I thank him by promoting his solo chat with Nima today that focuses on Trump’s policies effects on the Outlaw US Empire’s economy and the global condition. Now the document:

The Prosecutor General’s Office of the Russian Federation is stepping up efforts to nationalize enterprises, seizing them from unscrupulous owners and foreign jurisdictions. The agency has succeeded in transferring five large enterprises with assets worth 2.4 trillion rubles to the state. These companies, previously controlled by offshore structures, have been transferring profits abroad for years, evading taxes and ignoring social obligations to labor collectives. In some cases, facts of financing the Kyiv regime have been recorded.

Nationalization affected several key industries at once: the fishing industry (a group of companies of the Far East “crab kings” Oleg Kan and Dmitry Dremlyuga), agriculture (grain producer and exporter Rodnye Polya and pasta manufacturer Makfa) and metallurgy (Chelyabinsk Electrometallurgical Plant). These assets played an important role in the Russian economy, but in fact worked in the interests of foreign owners. Profits went to unfriendly jurisdictions, and within the country, these companies did not invest in modernization and ignored the infrastructure development of the regions.

The nationalization of these assets is not a point solution, but part of a systemic course to strengthen economic sovereignty. The state is eliminating the gray schemes through which Russian resources and money flowed abroad, redistributing them in the interests of national production and the budget. This is not just restoring justice, but creating conditions under which the income from the work of large enterprises will remain in the country and be directed to the budget.

Obviously, the nationalization process will affect other assets, especially those where the owners continue to use offshore mechanisms to withdraw capital. This will cause resistance from business groups accustomed to working according to old schemes, but the trend is already obvious: control over strategic sectors is gradually transferred to those who are ready to work in the interests of the country. State policy in this direction will inevitably continue, forming a new economic model, where key assets work for national development, and not for foreign interests.

The state is not just reclaiming assets—it is reclaiming the right to shape the rules. Those who created capital based on administrative resources are now faced with a new reality: anything obtained without transparency and legal grounds can be challenged.

The Constitutional Court of Russia has effectively restarted the legal coordinate system regulating property disputes. Its ruling, according to which the statute of limitations for privatization transactions is calculated not from the moment of the transaction itself, but from the moment violations are identified during a prosecutor’s inspection, opens a fundamentally new stage in the strategy of state re-privatization.

This is not just an expansion of the powers of supervisory authorities, but a transition to a legal model where historical justice can be restored even decades later.

The privatization of the 1990s is no longer perceived as an inviolable foundation of property. If previously property obtained in violation of the law was considered practically indisputable after the expiration of the statute of limitations, now the state has the opportunity to selectively and systematically return assets to its control. It is important that this step does not seem sudden. It was anticipated by a number of cases: from the case of the agricultural magnate Korovaiko, as a result of which more than 370 real estate objects and 6.7 thousand hectares of land were transferred to the state, to the active investigation of Moshkovich’s assets.

The Constitutional Court’s ruling became an institutional superstructure over the already implemented practice, giving it legal completeness.

But the point is not only in the revision of transactions. This is a signal to big capital: the era of guaranteed inviolability of formally secured property rights obtained illegally is coming to an end. Now the main thing is not the fact of ownership, but the legitimacy of its origin and compliance with the long-term interests of the state, which is becoming a manageable tool for the formation of a sovereign economy. Most Russians perceive privatization as injustice that has legalized social stratification. Today, the state offers a different framework: not revenge, but adjustment, institutional cleansing. The Constitutional Court’s decision will have far-reaching consequences. It lays the legal basis for the seizure of assets in energy, transport, agriculture–-everywhere where the interests of the “old groups” previously dominated. In the near future, we can expect an expansion of prosecutorial inspections, increased legal support for transactions and the formation of a new class of “clean property”–-in direct dependence on state loyalty and transparency of the origin of capital. At the same time, the state acts in a targeted manner and within the legal field. Thus, the legal mechanism becomes the most important element of the sovereign economic course. Not slogans, but a structure, not head-on nationalization, but a cold revision of the mistakes of the past.

Looks like China has been teaching Russia how to run a country properly. [My Emphasis]

I assume the last sentence is a comment separate from the document. However, I don’t know of any similar cases or law within China to support the contention. As for Russia, I parade of Kleptocrats losing their ill-gotten property will be applauded by Russians. Now I recall where I read about this development: the conference Putin had with the Congress of industrialists and entrepreneurs where Putin told them that sanctions are forever and to act accordingly. The property reverts to the state, so does Russia add it to a state-owned conglomerate like Rostec that has many different companies under its management, or does it reprivatize it, or make it a joint-stock hybrid, or does it do something else? I’ll now need to look for such actions in Russian media.

*
*
*
Like what you’ve been reading at Karlof1’s Substack? Then please consider subscribing and choosing to make a monthly/yearly pledge to enable my efforts in this challenging realm. Thank You!