Things from days gone by

Why the law on statute of limitations for privatization transactions has no legal meaning and will not protect anyone from arbitrariness

On May 13, the Duma approved in the first reading draft law No. 1208563-8 “On amendments to Article 217 of the Civil Code of the Russian Federation” on the privatization of state and municipal property. This article will be supplemented by an indication of the limitation period: three years from the moment when the party became aware or should have become aware of the violation of its rights, and in any case not more than ten years.

The draft, on the one hand, repeats the general rule on the limitation period set out in Art. 196 of the Civil Code, and in this sense is unnecessary. At the same time, he is silent about cases where the statute of limitations is not subject to application, and there are many of them, and there is a direct indication of them by the government, but not in the text of the draft, but only in the explanatory note to it.

The note refers to the resolution of the Constitutional Court of the Russian Federation dated October 31, 2024, according to which “in case of presentation of demands for seizure of property related to non-compliance by public officials (including former ones) with anti-corruption prohibitions and restrictions, the statute of limitations periods provided for by civil legislation do not apply.”

The statute of limitations will also not apply to claims for seizure of property under special laws: on the fight against extremism and terrorism (the most striking case is the “Nevzorov case*”), as well as on foreign investments in strategic companies (for example, the Domodedovo case).

279 deputies from United Russia voted for the adoption of the project in the Duma, 20 people from A Just Russia abstained, deputies from the Liberal Democratic Party did not vote, and 54 communists voted against. This reflects their views on the “predatory privatization” of the 90s and in particular on the loans-for-shares auctions of 1995, in which, more than 30 years ago, large industrial property passed into the hands of the first wave of “oligarchs” at inadequate prices.

The government that introduced the bill did not dare to directly transfer into it the position of the Constitutional Court, which, in its usual manner, formulated it verbosely and vaguely. Answering questions, Deputy Minister of Economic Development Alexey Khersontsev, who presented the project, explained that

“in cases where there is evidence that the owner of the property or persons associated with it acquired it as a result of a corruption offense, the statute of limitations will not apply.”

Strictly speaking legally, “proof of a corruption offense” can only be a guilty verdict from a court. But in criminal law there are also statutes of limitations - for example, a person who has committed fraud, including on a particularly large scale, is released from criminal liability after ten years. But, according to current practice, civil courts do not rely on verdicts: when considering anti-corruption claims, they consider a significant excess of the value of property acquired by officials over their official income as sufficient evidence of corruption violations.

An analysis of bill No. 1208563-8 and the explanatory note to it shows that there is absolutely nothing new in them. Why was the draft introduced - and not by some little-known deputies, but by the government itself? This is a purely bureaucratic implementation of the president’s instructions, which were given to him based on the results of a meeting with entrepreneurs in December 2024, and then in the summer of 2925 based on the results of the St. Petersburg International Economic Forum.

The discussion in the Duma, which happens here infrequently, shows to what extent the issue of privatization/deprivatization remains acute not in the legal, but in the political plane.