The Russian Legal System 101
The Russian legal system has evolved over the course of many centuries, and its basic framework and philosophy have been primarily shaped by a number of interconnected factors. Though not directly influenced by its geographical location, the ancient state of Russia had been centered around waterways that served as trade routes for the region. The Byzantine tradition of law and its codification through the Suda in 1073 and the Constitutio Criminalis, abbreviated as "Apostolos", in 1089 would form the roots of the Russian legal system. In the 15th and 16th centuries, the state began developing more sophisticated laws, such as those found in the Russian Code of 1467 and the Sudebnik of 1550. The actual development of codified law, however, did not occur until the 17th century. By that time, the modern seeds of the Russian legal system were being planted: the list and codification of laws were publicly available, which were generally administered by magistrates and incorporated into a central code, though these codes were fragmented and not yet thoroughly organized.
Under the rule of Peter the Great from 1682 to 1725, administrative, legal, and judicial branches of the government began to take form. During his reign, Russian law was somewhat homogenized, but it was not until Catherine II came to power in 1762 that the Russian legal system began to take its current shape. She commissioned the codification of existing laws into one comprehensive code, but it was never completed. Her monumental effort, which lasted almost three decades, would serve as the foundation for the Russian legal system, as it continues to be utilized today. Specific reforms to the justice and administrative systems can be seen throughout the era with the establishment of courts and the Supreme Court in 1796 in St. Petersburg, which sought greater organization within the judicial system. Though the period of stability under Catherine II would end with her death in 1796, judicial reforms under subsequent Tsars would continue to fuel the development of Russian law. The next major transition for Russian law would occur during the October Revolution in 1917, which would pave the way for the Soviet era and a new type of law.
The development of law in the Soviet era would serve as the bedrock for the modern Russian legal system. By 1925, a new State Constitution was adopted which would serve as the basis for Soviet law and a number of Civil Codes. Most notably, the 1964 Civil Code of the RSFSR (the RSFSR included present-day Russia, Ukraine, Belarus, and Kazakhstan) would remain in force until the collapse of the Soviet Union in 1993 , when the current Russian Federation began its transformation into a fully market-based economy. By the time this new genre of law began to take shape, most legal professionals had never encountered a fully market economy or a democratic political system.
The legal system in Russia today is based on a civil law system grounded in Roman-Germanic traditions. The Constitution, which was adopted in December 1993, remains supreme law of the land along with the federal laws, codifications, decrees, and orders of the President and Government of the Russian Federation. Further laws are developed and formulated by federal, regional, and local bodies, including an extensive number of decrees, orders, and determinations of various government officials. Russia is subdivided into numerous federal subjects, which include republics, territories ("kraj" or "kray"), regions ("oblast"), autonomous regions ("autonomnoy okrug"), federal cities ("goroda federal’nogo podchineniya"), and an autonomous region ("avtonomnaya oblast’"). Each subject has expansive legislative powers unique to its structure, which can include such provisions regarding private law, inheritance, family law, land use and environmental law, and more, though the Constitution does restrict their scope.
The law is generally administered by multiple layers of courts, with jurisdiction split primarily between twenty-one regional/territorial courts and specialized federal arbitrazh (commercial) courts. Civil suit decisions made by land courts and district courts may be appealed to these regional/territorial courts, which have original jurisdiction over claims exceeding 100,000,000 rubles, federal taxes, appropriations claims over 25,000,000 rubles, bankruptcy cases for regional/territorial companies, and certain other types of claims. Other courts of first instance have jurisdiction over claims below the £25,000,000 rubles threshold.
The President of the Russian Federation, who is elected for a six-year term, serves as the Head of State and is responsible for a number of executive functions. The Government of the Russian Federation, especially the Council of Ministers, constitutes the executive branch and serves primarily as an arm of the President. The government is ultimately responsible for developing policy for domestically and abroad. Parliament, which consists of the Federation Council and the State Duma, is charged with passing federal laws subject to the president’s approval. A highly fragmented legislative system with a number of committees, the Parliament represents all Russian citizens and has a special role in developing the state structure of the Russian Federal Republic.
Constitutional Law in Russia
The Constitution of the Russian Federation (hereafter the Constitution) was adopted on December 12, 1993 by an electorate that turned out almost 90 percent. As the highest and most authoritative legal text in the country, the Constitution has no equal in Russia’s hierarchy of laws. It is considered the fundamental legal source upon which all other laws of the land must originate. As such, any law that is inconsistent with a constitutional provision is not law at all.
Article 1 of the Constitution declares that the Russian Federation "is a democratic federal law-governed state with a republic form of government." The supremacy of law, as enumerated in Article 15 of the Constitution, guarantees that "the Constitution of the Russian Federation, federal statutes issued in accordance with the Constitution of the Russian Federation, as well as ratified international treaties of the Russian Federation shall have superior legal force and direct effect on the entire territory of the Russian Federation."
The Constitution delineates the framework under which the Russian Federation will be organized, governed and operated. Therefore, it sets forth the separation of powers. Article 10 states that state power is exercised concurrently by the legislative, executive and judicial branches. However, federal law does not specifically lay out the roles of each branch with precision. On the other hand, the Constitution does detail the division of government into federal entities and the power among federal governing bodies. The following list demonstrates what the Constitution prescribes with regard to powers in the federative system:
The Constitution outlines how the legislative process will work. It approves of a bicameral Federal Assembly, composed of a State Duma (lower house) and a Council of the Federation (upper house). It places restrictions on who qualifies to be elected to either body, and describes the procedures for proposing and adopting federal and regional laws. The State Duma adopts federal laws and the agenda for the Federation Council’s consideration. These provisions are codified in Federal Statute No.184-FZ of 17 December 2001 on the General Principles of Organisation and Activity of Legislative (Representative) Bodies of State Power of the Subjects of the Russian Federation (the "Law on the Status of the Subjects of the Russian Federation").
In Russia, legislative, executive and judicial bodies operate under a set of principles called "democratic centralism" as described in the Law on the Status of the Subjects of the Russian Federation. At the core of this principle is the idea that individual regions that make up the federation enjoy a high degree of autonomy in self-government. Article 11 of the Constitution gives subjects of the Russian Federation the authority to establish their own constitutions or charters, terms of office and structure of bodies of state power.
The Constitution serves to create the legislative framework upon which the Russian legal system is built. While there are no express provisions with regard to what a legislative enactment consists of, the takes into regard any principles set forth in the Constitution with respect to the legislative process.
State and Regional Laws in Russia
Federal law is supreme in Russia’s legal system and will always apply to inhabitants of the country, but Russia does not have a unitary system of law. The Russian Federation is made up of 89 different members with varying degrees of administrative autonomy. These members have their own bodies of law that apply within their territories. In other words, Russia is made up of many regional jurisdictions that together compose a larger uniform law system.
The Constitution of the Russian Federation divides legislative power (the ability to make and change laws) between federal legislative authorities and regional legislative authorities. Although the Constitution delineates powers between federal and regional authorities, in reality there is still much debate about whether a particular subject should be governed under federal or regional law.
In broad terms, federal legislation includes laws related to taxes, customs, intellectual property protection, criminal justice, labor relations, living standards, civil procedures, bankruptcy, foreign investment, citizenship, and the legal status of religious organizations. Regional legislation includes laws related to education and culture, land ownership, administrative procedures, ecology, health and medical care, local taxation, public transportation, housing, and local utilities.
For example, banking and antitrust laws and general regulations governing car ownership, although applicable on a federal level, may have their own regional variations, and those variations may have a greater impact on business activities than the baseline federal regulation. The Russian Constitution explicitly recognizes regional variation in certain areas, such as regional languages. Because regional law exists in a relatively unstable system, it is often changed quickly without much uncertainty as to whether a particular regional law is subject to revision by a regional court.
For example, the typical limit on retrospective application of new laws in the Russian system is three months, except for tax law. Therefore, new laws may have retrospective application on individuals, businesses, and other organizations. For example, if a new tax regime is enacted wherein the tax base is increased, businesses are often required to pay the new rate from the month it was enacted rather than from the first day of the next tax year. On the other hand, there is no limitation period in Russian law in favor of the taxpayer. If the tax authority over assesses an individual or business, the tax authority may go back indefinitely in time and collect default interest, late fees, and penalties.
Russia’s Court System
The Russian court system is a complex structure defined primarily by constitutional guarantees, which is then further determined by the detailed legislation of the Russian Federation Interests. The Constitution sets the framework for the judiciary and other law enforcement bodies, while also clearly delineating between the powers of the legislative and executive branches. However, it is the Federal Constitutional Law On the Judicial System of the Russian Federation—and the provisions therein—that implement the constitutional design of the judiciary. The lower courts make up most of the court system and form the bulk of the judiciary.
The main federal courts are the Supreme Court, the Constitutional Court, the Supreme Arbitration Court, and the Courts of General Jurisdiction. Cumulatively, these courts make up the hierarchy of the Russian court system, which includes the:
The highest court in Russia is the Supreme Court. The Supreme Court is responsible for overseeing the implementation of Supreme Arbitration Court and general jurisdiction court decisions. This includes judicial review of lower courts’ decisions to ensure the uniform judicial practice throughout the judicial system. The Supreme Court is the final appeals court for all civil cases and is the court of cassation for all criminal cases. If the decision is issued by the Supreme Court Chamber for Civil Cases or the Supreme Court Chamber for Criminal Cases, it can only be appealed to the highest court of the Russian Federation—the Constitutional Court. Additionally, the Supreme Court issues decisions on questions of topical nature that are essential for the uniform application of law throughout the judicial system.
The constitutional body responsible for interpreting the Constitution of the Russian Federation is the Constitutional Court. It defines the principle of legality as a "stable order of the constitutional court system aimed towards the law application harmonization in order to protect human rights and freedoms." The purpose of the Constitutional Court is to ensure that law enforcement bodies and courts comply with the Constitution. The court can declare laws and other legal acts (if they are adopted by a body that is part of the judicial system) or their provisions unconstitutional. Additionally, the Constitutional Court interprets the Constitution and clarifies any issues concerning its application.
Lawyers and the Administration of Law in Russia
In 2010 the system of Russian legal education was reformed and a three-tier system was adopted. According to this system, a person obtains the legal profession through three types of education: (1) higher professional education – either university or postgraduate education; (2) the bar exam; and (3) professional qualification examination – either in a court or among an organization of judges and lawyers. Legal education at the university level is made up of two stages. At the undergraduate level, a student may be studying in law, economics, etc., and then goes on to a two-year post-graduate program , which provides them with a law degree in a particular specialization. Only after completion of this program can a student take the bar exam or the professional qualification examination. According to the Code of Professional Ethics for Lawyers, lawyers are prohibited from taking part in any activities except those for which they have received special training in. The Professional Association of Arbitrators therefore provides training in various areas of commercial practice for arbitrators to enhance their knowledge. Additionally, new training programs are developed based on the Law School Training Program for Arbitrators of Singapore with a view to ensure that the designation "Fellow of the Singapore Institute of Arbitrators" is recognized in Russia.
Criminal and Civil Law 101
The Russian Federation maintains separate courts for criminal and civil matters. Criminal matters are handled by the Federal Service of Bailiffs, federal district level courts, and then, as a final resort, by the Supreme Court of the Russian Federation. Civil cases are handled by General-Civil Courts and the Supreme Commercial Court of the Russian Federation. In addition, there also are Commercial Courts headquartered in various parts of the country.
As a further refinement, at all levels except the Supreme Court, cases may be handled by panels of judges, with a panel consisting of either one or three judges at a given level. The Supreme Court of the Russian Federation generally consists of divisions of specialized judges for civil and criminal matters, administrative law, and other areas. There is substantial distinction between proceedings before the various judges in criminal and civil law matters, with the differences largely attributable to the heavy role that State prosecutors play in criminal matters. In light of this role, the Russian judicial system is more formal in criminal matters than in civil matters.
Legal Reform in Russia: What’s New? What’s Old?
On many occasions clients will ask the firm to comment on the latest Russian "legal reform" and the effect it might have on their business plans in Russia. These questions are not usually easy to answer. We recently summarized the situation in a post entitled, Russian Law: So Much Turmoil, So Little Legal Reform. Its lead-in line read: It can be hard to see the forest for the trees when it comes to Russian legal reforms because there are so few trees amidst all the forests. That post went almost two full years without anything having really changed and then these last two years have been full of legal changes that although they are by no means law firm appropriate, are changing the way we do business in Russia. There have been extensive changes to both the corporate and bankruptcy laws, and I can’t remember another time during which Russia’s labor laws experienced so many changes. But what’s remarkable about all of these changes is that they affect very few people and companies. The most "general public" effect law has had in Russia in recent years has been from the introduction of certain (but by no means all) "anti-corruption laws" that have pertained to only certain sectors and industries. The Russian legal system remains opaque, largely because no one pays much attention to it and little is or can be done at a practical level. Even anti-corruption laws, in practice, have more effect on the Russian officials subject to the laws than on non-Russian officials "subject" to the laws’ indirect effects. On balance, the Russian government’s efforts to change its laws over the past few years arguably are directed not at creating an environment in which Russian courts and other state agencies will, no matter how well-written Russia’s laws later turn out, actually apply or enforce Russian laws or standards in a reasonable manner. Such an environment would make Russia more favorable to foreign investment, but that’s not really what Russia aims. From the perspective of foreign investment, what these legal reforms tell us is that compliance with any sort of sector-specific laws that do exist in Russia becomes even more important and also more difficult. Non-compliance with such laws can lead to significant negative publicity and administrative sanctions within Russia that may become the object of many and varied types of foreign social media and news outlets.
The Current State of the Russian Legal System
Despite significant legislative improvements in the Russian legal system over the last decade, challenges remain. The independence of the judiciary is still a far cry from the ideal set out in the current Constitution. This means that there is, on a practical level, a very real de facto lack of separation of powers between the legislature, executive and judiciary. There are serious issues with corruption, intimidation and harassment. Judicial independence may only be technically enshrined in law due to the influence of the executive on the judiciary in practice. In addition, the judiciary is not transparent or representative of the society it serves.
In recent years, there has been a greater push towards developing a system of courts specialising in judges considering and determining cases in a particular area. It is not unusual for a Commercial Court judge to have a background in the financial industry, for example, or for an Arbitrational Mediator to have previously worked as a lawyer in a human rights organisation. However, such initiatives by persistently forward-thinking judges are not consistent across the jurisdiction.
A wide spread of attitudes towards law both in the legal profession and in society at large contributes to this. Russian nationals are not known for their respect for the rule of law, and this has long been the case. This makes practice in Russia for foreign lawyers challenging as not all Russian lawyers are respectful of the judiciary . This has resulted in a lack of esteem from certain Russian lawyers and members of the general public.
Foreign lawyers who are in possession of visa to go on business trips to Russia often suffer from waiting for hours to go through customs at Domodedovo and Sheremetyevo International Airports because members of the Russian bar profess to be able to wait in line and cut ahead of the foreigners. Consequently, many of the foreign associates may encounter hostile treatment from the Russian bar as a result of this. This hostile treatment is often articulated through physical violence and/or threats, notably from commercial lawyers who represent competing individuals and the victims of theft by employees and cheating/exporting foreign business. Some Russian lawyers, who are less than competent, are also lower in hierarchy than their business-people clients and so there are no repercussions for this practice.
Regardless of the reason, the warmth of the welcome afforded by the Russian bar to foreign lawyers can be palpably chilly.
Lawyer-student relations are also strained. This is impacted by the general impression that students are overbearing, drunk and over-enthusiastic about partying. Many students at the most prestigious law schools in Russia (e.g. MSU) have also been known to be hostile to foreign lawyers, trying to afford themselves more prestige by displaying disrespect when in company.
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