YELTSIN VETOES LAND CODE; APPROVES FIRST PRODUCTION-SHARING SITES.

Russian president Boris Yeltsin on July 25 vetoed the draft Land Code passed by both houses of the Russian parliament because it outlaws the free sale of agricultural land. Yeltsin says this violates Russian citizens’ constitutionally-guaranteed right to own land since the right to sell is an essential component of the right to ownership. The deputy head of the Duma’s Committee on Agrarian Issues, Communist parliamentarian Sergei Nigkoev, said the Duma would not immediately try to override Yeltsin’s veto but would first, as the president proposed, try to resolve the differences through a conciliation commission made up of representatives of the president and parliament. But Nigkoev reiterated parliament’s categorical opposition to the free sale of agricultural land; otherwise, he said, much of Russia’s land will "immediately pass into the hands of foreigners." (Itar-Tass, ORT, July 25)

On July 22, Yeltsin signed into law a bill approved by the Duma allowing the conclusion of production-sharing agreements (PSA) for the exploitation of seven natural-resource locations. Five are for oil deposits, one for gold, and one for iron ore. The approval of at least some PSA agreements was welcomed by western business commentators but it was noted that only two of the sites — the Kuranakh gold deposit and the Prirazlomnoe oil deposit on the Barents Sea shelf — will be open to foreign investors. The other five — the giant Samotlor oil and gas condensate field, the Krasnoleninsk oil field, the Yakovlev iron ore deposit, the Romashkino oil field, and oil deposits on Sakhalin island — will be opened only to domestic investors. (Rossiiskie vesti, July 24) The law illustrates the Duma’s continuing restrictive attitude toward foreign investment in Russia’s natural resources and the unsatisfactory nature — from the point of view of the western investor — of the underlying PSA legislation, which gives parliament the right to scrutinize and approve potential locations piecemeal.

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