Russia Country Profile

Land Administration

Individual Corruption

INDEM 2005 reports that the readiness of citizens to bribe to obtain or legalise property fell from 75.6% to 41.9% in the period 2001 to 2005, but the average value of a bribe payment rose in the same period.

Business Corruption

Property rights are formally defined by Russian law, but according to the Bertelsmann Foundation 2010, they are not consistently implemented or safeguarded against state intervention.

For SMEs, a 2007 report by CEFIR, a Russian economic policy think tank, states that the process of buying or leasing land can last from two to six months. Among procedures, obtaining land from the government is the least transparent one and most costly from the point of view of finance and the time. Although transparency in this area has improved, companies increasingly need to visit a growing number of agencies related to these procedures, resulting in a major cost in time spent. Leasing or buying land from the government can be especially difficult. Some local administrations will occasionally expect foreign companies to pay bribes or undertake social work in the region in return for registration, purchasing or leasing of land.

Political Corruption

According to CEFIR 2007, an increase in procedural transparency for both the purchasing and leasing of land has encouraged a significant decrease in the incidents of bribe pressure on the part of bureaucrats during these procedures.

Freedom House 2009 describes property rights in Russia as 'precarious'. According to the report, state takeovers of key industries, coupled with large tax liens on select companies, have reinforced perceptions that property rights are being eroded and that the rule of law is subordinated to political considerations.

According to Transparency International's Global Corruption Report 2009, the Moscow City district prosecutor, Vladimir Samoilov, as well as several other top prosecutors were found to have falsified cases against private companies and illegally confiscated their property; the value of the property was estimated to be as much as USD 22 million.

Frequency

The World Bank & IFC: Doing Business 2010:
- It takes an average of 6 procedures and 43 days at a cost of 0.1% of the property value to register property and secure property rights.

World Economic Forum: The Global Competitiveness Report 2009-2010:
- Business executives give the protection of property rights in Russia, including financial assets, a score of 3.1 on a 7-point scale (1 'very weak' and 7 'very strong').

Transparency International: Global Corruption Barometer 2009:
- 16% of the households surveyed reported to have paid a bribe to land services in 2008.

- 50% of households consider grand or political corruption in land matters to be a 'very serious problem'.

- 46% of respondents consider bribes to land authorities to obtain favourable decisions a 'very serious problem' in Russia.

CEFIR: Monitoring of the Administrative Barriers to Small Business Development in Russia 2007:
- 80% of companies surveyed that bought the premises from the government spent an average of approximately 1.5 months on the procedure.

- The remaining 20% of companies surveyed spent around six months on the procedure.