The order is impossible

The amendments proposed by the government will not stop the process of deprivatization of large property

The government submitted to the Duma bill No. 1208563-8 “On amendments to Article 217 of the Civil Code of the Russian Federation.” As often happens, under a meaningless title hides an acute and pressing issue: the recognition of illegal and invalid acts of privatization of state and municipal property, most of which were committed back in the 90s.

It is proposed to supplement Article 217 of the Civil Code with a clause referring to the general periods of civil limitation, which are three years from the date of discovery of a violation of the law and a total of 10 years for all transactions. What then is the question that was raised by the head of the Russian Union of Industrialists and Entrepreneurs, Alexander Shakhin, at the meeting of the president with business representatives back in December 2024?

The question arose in connection with the decision of the Constitutional Court of October 31, 2024, in which it indicated that if property is confiscated due to non-compliance with anti-corruption prohibitions and restrictions, then the statute of limitations does not apply.

Following the results of the December 2024 meeting with business on January 15, 2025, Putin gave the government and the Russian Union of Industrialists and Entrepreneurs an instruction to prepare proposals by April 1, 2025 on how to separate the wheat from the chaff and ensure the rights of bona fide purchasers of property. But within the specified period, not only were no proposals prepared, but the Constitutional Court on April 14, 2025 once again confirmed that in the case of corruption violations, the statute of limitations begins to run from the moment they are discovered during a prosecutorial audit.

The amendment proposed by the government to Article 217 of the Civil Code, on the one hand, is a belated reaction to the president’s order, and on the other hand, it changes little in essence. The decisions of the Constitutional Court continue to apply, covering the “anti-corruption claims” increasingly brought by the General Prosecutor’s Office, based on the law “On control over the compliance of the expenses of persons holding public positions and other persons with their income.” The amendment will not affect claims for the seizure of property of “extremist communities,” as well as those based on the fact that the owners of strategically important enterprises have foreign citizenship.

The proposed amendments will apply only to those privatization transactions during which formal violations of its “order” were committed more than 10 years ago.

The amendments also do not make a difference between the initial purchasers of property and those who acquired it later, not always having information about all the details of privatization.

An analysis of the consequences of the proposed amendments, if they are adopted in the proposed form, allows us to conclude that the President’s order of January 15, 2025 has not been fully implemented. But it could not be fulfilled, since, along with issues of legality and justice, the deprivatization process has in mind the goal of filling the state treasury and redistributing property in favor of new “elites.”