Publication: Monitor Volume: 6 Issue: 195

Vladimir Kozhin, the Kremlin’s “property manager,” confirmed this week that precious stones and metals from Gokhran, the Finance Ministry’s depository, will be sold off at a hotel-and-auction complex on Red Square. Kozhin said that the planned hotel-and-auction center, the Federal Kremlin Complex, would use a building on Red Square now used by the Defense Ministry, cost US$300 million to build and be ready in two to two-and-a-half years. He also said that only gems and metals with no “state or historical value” would be sold, that no budget money would be used to build the complex and that investors had already expressed interest in the project. Kozhin first broached the idea of attracting private foreign investments into projects launched by his office during a Harvard University-sponsored U.S.-Russian investment symposium held in Boston earlier this month. Following that meeting, the newspaper Segodnya leaked word of the planned hotel-and-auction center (see the Monitor, October 10).

Kozhin also said that President Vladimir Putin would soon issue a decree making the Kremlin property department and the Foreign Ministry the only structures with the legal right to manage Russian state property located abroad. According to Kozhin’s predecessor, Pavel Borodin, Russia own US$50 billion worth of property in seventy-eight countries. Kozhin said that the Kremlin property department currently controlled about 30 percent of Russian state property located abroad, but that this would rise to 60 percent with Putin’s decree. The new presidential decree will give the Foreign Ministry control over Russian embassies and trade missions abroad, while the Kremlin property department will control the rest of the state’s foreign property holdings. Kozhin said that the foreign property is currently being inventoried, after which a decision will be made on how much to keep under state control and how much to sell off (Moscow Times, Vedomosti, October 19).

Thus it appears that the expected decree from Putin on foreign property will not only not limit the power of the Kremlin’s property department, which became a huge commercial empire under Pavel Borodin, but actually increase it. According to one interpretation of Russian law, the Ministry of State Property, not the Kremlin property department, should have control of the state’s property abroad (Vedomosti, October 19).