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[Congressional Record Volume 154, Number 177 (Thursday, November 20, 2008)]
[Extensions of Remarks]
[Pages E2313-E2314]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

  THE BUSINESS CLIMATE IN RUSSIA AND THE STATES OF THE FORMER SOVIET 
                                 UNION

                                 ______
                                 

                         HON. ALCEE L. HASTINGS

                               of florida

                    in the house of representatives

                      Thursday, November 20, 2008

  Mr. HASTINGS of Florida. Madam Speaker, after the summer recess, the 
Helsinki Commission, which I chair, was preparing to conduct a hearing 
on United States and Western businesses at risk entering markets in 
Russia and the former Soviet Republics without the protections 
guaranteed by the rule of law and government adherence to market 
principles. The hearing had to be postponed due to the invasion of 
Georgia, but it is our intention to take up this issue in the next 
Congress.
  The Helsinki Commission, and the OSCE, is fully committed to the 
development of democracy, civil society, the rule of law and free 
markets in the Russia Federation and in other states of the former 
Soviet Union. We trust that Russian President Medvedev shares that 
commitment when he proclaims that ``my most important task is to 
further develop civil and economic freedoms.''
  Yet we see evidence that Russian authorities continue to selectively 
prosecute and harass human rights advocates, prominent business leaders 
and journalists by employing arbitrary and extralegal means to achieve 
state and political ends. This is often accomplished through a 
manipulated court system, thus denying its citizens and foreign 
investors the impartial application of the rule of law and equal 
justice.
  In June, 1992, the United States and Russia negotiated and signed the 
Bilateral Investment Treaty, which grants investors the protections and 
safeguards necessary to conduct business in a fair and transparent 
environment. Unfortunately, Russia has failed to ratify this important 
measure that would ultimately serve the economic interests of both our 
nations.
  Along the same lines, it is regrettable that Russia refuses to ratify 
the Energy Charter

[[Page E2314]]

Treaty. This measure insures the rights and protections of private and 
public sector interests against a government taking arbitrary action 
that would disrupt or threaten global energy security. The thousands of 
United States investors who became shareholders in the Russian oil 
company, YUKOS, lost everything when the Russian government seized the 
company's assets.
  Finally, Russia has not honored its pledge to amend its federal laws 
to guarantee protections of intellectual property rights and enforcing 
such laws consistent with international standards. I would note the 
frequent Western media reports on cases where Russian authorities have 
seized the assets of certain companies, many with foreign investors, 
utilizing executive decrees, court orders, and extradition requests to 
assume ownership or control over Russian enterprises. Some foreign 
investors have been compelled to surrender their equity shares in 
Russian companies without proper due process and compensation only to 
have Western courts, in a series of cases, issue rulings in favor of 
such companies.
  Madam Speaker, we appreciate that our economy is truly global and 
American and Western investments are essential in Russia and throughout 
Eurasia, given their abundant natural resources, and urge that all 
countries can mutually commit to an economic relationship that is based 
on mutual trust, the rule of law and market forces that are free of 
arbitrary or capricious government activity.

                          ____________________
```