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Russian law: theory and practice №1 – 2017
TABLE OF CONTENTS
From the Editor-in-Chief С. 5-6
This article discusses the constitutional framework of national interests ensurance in the United States under the 18th century American Constitution and makes some comparisons with the constitutional framework of national interests ensurance in Russia under the 20th century Constitution of the Russian Federation. The 18th century American Constitution reflects 18th century notions of checks and balances and separation of powers between the legislative, executive and judicial branches. There are specific powers allocated to each branch and some interactions between the branches. This applies to national interests ensurance as well. So, while Congress has the power to declare war, the President is the Commander-in-Chief of the Armed Forces, and there is some tension between these powers when the President takes action to commit the United States to armed conflict. So too, while the President has the power to enter into treaties on behalf of the United States, every treaty must be approved by a two-thirds vote of the Senate. The one exclusive power over foreign affairs that the American Constitution gives to the President is the power to recognize foreign governments, and Congress cannot interfere with that power.
Key words: 18th century American Constitution, separation of powers, international law, Presidential disapproval of legislation, Congressional grant of broad power to President to administer and enforce legislation, Russian President and Russian foreign policy, “political question”, American President and recognition of foreign governments, Congressional power over foreign affairs and conflict with Presidential power, President and Congress and armed conflict, executive agreements, Cuba and Cuban trade embargo, Iranian nuclear agreement, American sanctions, Russia, and Ukraine.
Poland is currently under criticism for an amendment of the Constitutional Tribunal Act passed by the new government majority party called Law and Justice (PiS). In 2015, the legislative change was adopted, which introduced an obligation for the Constitutional Tribunal to discuss an unconstitutionality of an act only in the presence of at least 13 judges, under the chairmanship of President or Vice President of the Constitutional Tribunal. An act is unconstitutional if two-thirds of the judges vote for it. The author compares this requirement with the adjustment in Bohemia, Moravia and Silesia in the past and present.
Key words: Poland, Constitutional Tribunal.
The article considers the issue related to a historical search of public consciousness and practical application of mechanisms and means of the rule of law protection. The article gives different options of fixing and protecting the rule of law that were used even in ancient times (religious ideas and condemnation; formation of people’s consciousness in the process of legal and moral upbringing; appointed and elected officials as personified keepers of law; interpretation of law by Roman lawyers; protecting bodies of cosmic basics of the rule of law mentioned by Plato, etc.). The author proves that the way of social creation of modern constitutions is a historically long search for the most suitable form to ensure unity, stability and hierarchy of the legislation system.
Key words: constitution, the rule of law, fundamental law, constitution, legal rule, public consciousness, law practice, hierarchy of law, legal system stability.
The article is devoted to the issues of improving tax compliance in Russia. The tax gap leads to the loss of the planned revenues to the budgetary system; therefore, the Russian Federation, as many other countries, is trying to give an adequate forecast of the possible tax gap and minimize the amount of the falling out revenues. To decrease the tax gap it is necessary to adopt a complex of measures such as improving: (1) access to information needed by tax administrations, (2) exchange of information between tax administrations of different countries (3) cooperative compliance and risk management. Thus, at present Russian tax law includes both traditional and modern forms of tax control that need to be developed in the following directions: (1) providing for the expanded electronic documentation circulation between the tax administration and taxpayers, (2) reduction of time and material costs of the preparation and submission of tax returns to the tax administrations, etc. The plan “On Improving Tax Administration” adopted by Decree of the RF Government of 10 February 2014 No.162-r is aimed at the optimization of the system of tax administration and creating the atmosphere of comfortable communication with businesses. The effective elimination of the tax gap requires coordinated and consistent application of the abovementioned measures taking into account the economic situation and the actual capacity of certain categories of taxpayers in regard to paying taxes.
Key words: tax compliance, tax gap, tax audit, transfer pricing, CFC-rules, voluntary disclosure programs, exchange of tax information, co-operative compliance (“horizontal monitoring”), risk management, tax administration.
This article provides a focused review of special economic / tax zones legal regime in the Russian Federation. In particular, the author describes the Russian domestic special tax zones regulations, the aims for establishing special economic zones and their possible types. The article also analyses the issues of similarities and differences between the concepts of “tax haven” and “special zones”.
Key words: tax law, special tax zones, special economic zones, tax havens, BEPS.
ECONOMY, BUSINESS AND LAW
The article contains a critical analysis of the RF government’s Anti-crisis plan. The author makes some general conclusions and recommendations aimed at ensuring stable economic and social development. First of all, the author underlines that the idea of economic modernization is obviously not objectionable and doubtful. Therefore it is necessary to define its spheres, aims, and principles. So far, there are only declarations!
Key words: modernization of the economy, Anti-crisis plan, Russian GDP, inflation, unemployment level, a new concept of managing national economy, recommendations on drafting new laws in the sphere of economy and entrepreneurship.
The approval procedure for related party transactions has recently been amended in the revised version of Russia’s Federal Law “On Joint-Stock Companies”. The amendments effective from 1 January 2017 replaced the concept of an “independent director” by that of a “disinterested” one. This paper analyses the two concepts and their treatment in Russia’s legislation on joint-stock companies. The definitions of the disinterested director and the independent director are provided. The paper also analyses the issue of mandatory inclusion of independent directors in public companies’ boards.
Key words: board of directors, a public company, the independent director, the disinterested director, a transaction affected by a conflict of interests.
The article focuses on the recent reform of interested party deal regulation in joint-stock companies. The author considers main amendments of Federal Law “On Joint-Stock Companies”, theoretical aspects of conclusion and approval of interested party deals, analyses the concept of the conflict of interests as a whole and proposes certain amendments in this respect.
Key words: interested party deal, corporate approval, conflict of interests, jointstock company, corporate interest.
An algorithm aimed at classification of civil action proceedings can be developed. The elements of the legal action (cause of action, subject of action, litigants (plaintiff and defendant)) form four groups of features necessary and sufficient to form the basis of juridical classification of civil cases.
Key words: legal cause of action, actual cause of action, subject of action, claim for compensation (for enforceable judgment), claim for declaration of right (sans enforceable judgment), plaintiff, defendant.
The article is devoted to the aspects of a warranty period. Its significance is shown for the legal ensuring of the quality of goods supplied under a contract.
Key words: goods quality, delivery contract, warranty bond, warranty period, standard, technical regulation.
The new legal norms on the elimination of accumulated environmental harm in the Law on Environmental Protection came into force on 1 January 2017. Now the basic legal concepts were defined in the legislation, related to the liquidation of the harm, the accounting treatment of objects of accumulated environmental harm, regulatory requirements to the implementation of the liquidation operations. But these rules are far from being exhaustive and integrated; there are many gaps in the legal regulation. At the same time, there is another legal regulation which is used for a number of objects in the Arctic. Thus, the new legislative regulation has given rise to many practical problems and issues, the answers to which should come as soon as possible in law additions, in the regulatory legal acts of a sublevel and also interpretations of courts.
Key words: accumulated environmental harm, accumulated environmental damage, liquidation of accumulated environmental harm, environmental legislation, Law on the Environmental Protection, the Arctic Zone of the Russian Federation.
The major quantity of countries allows foreign investors to enjoy national treatment. But in some cases, for example, in order to protect national economic security, states use restrictive exceptions from national treatment. This article examines Chinese and Russian legislation on this issue. Based on the analysis of national laws, the classification of restrictive exceptions was made. The main criteria of restrictions division are territory; the sphere of economic activity; objects of civil rights which allowed as investments; corporate management and establishment of foreign invested legal persons. This article argues that Chinese restrictions on foreign investments are stricter than Russian ones. The authors conclude that restrictive exceptions from national treatment are necessary but only if they are justified.
Key words: foreign investments, restrictions, joint ventures, Chinese law, exceptions from national treatment, strategic business entities.
The article focuses on the mechanisms of protection of minority shareholders. The author tries to highlight the main remedies of protection of minority shareholders’ interests and evaluate whether they adequately protect the interests of minority shareholders.
Key words: minority, protection of interests, Companies Act, shareholders, derivative claim, petition, losses.
On the basis of the Russian and Chinese legislation, judicial practice and special literature, this article discusses the possibility of applying the provisions of the Federal Law “On Insolvency (Bankruptcy)” of 26 October 2002 to the Chinese nationals registered as individual entrepreneurs. The article also reviews the Chinese legal regulation and offers recommendations on the enforcement of court judgments on bankruptcy and collection of debts from the PRC nationals. The cross-border insolvency of the Chinese nationals encounters obstacles at three levels. Firstly, the awards of the Russian arbitration courts have not been practically executed in the PRC due to inadequate notification of the Chinese party in the case. Secondly, Chinese courts in principle are extremely reluctant in recognizing foreign judgments on bankruptcy, and such cases are exceptional. Thirdly, there is no personal bankruptcy institution in the PRC, while bankruptcy of individual private enterprises, close to it, is not applied in reality, and there are no legislative prospects for the personal bankruptcy in the nearest future.
Key words: cross-border insolvency, personal bankruptcy, bankruptcy of individuals, China, People’s Republic of China, recognition of the court judgments.
Since December 2013, Russia began working over arbitration enhancement. The new Federal Law on domestic arbitration adopted in December 2015, numerous amendments to legislation on international commercial arbitration, to the Civil Procedure Code of the Russian Federation and the Commercial Procedure Code of the Russian Federation became a result of intensive work. Drafting the amendments, the lawmaker took into account leading achievements of Russian and foreign jurisprudence as well as considerable experience accumulated since 1992 when the first “Provisional Regulations on Arbitration Courts for Economic Disputes Resolution” were adopted as a statute. The fruitful work executed by leading domestic experts entailed the new high-level Russian arbitral legislation.
Key words: arbitration, arbitral law, arbitrability, corporate disputes, arbitration agreement, arbitral tribunal, arbitral proceedings, interim measures, arbitral award, recognition and enforcement of foreign arbitral award