Reuters - 07.26.2006

World Bank sees Russia judiciary on improving path

By Gilbert Le Gras

WASHINGTON - (Reuters) - Russia's public watchdogs in general and its judiciary in particular have deteriorated in the last few years but Moscow is investing heavily in improving its court system, a World Bank official said on Wednesday.

"Russia has adopted quite a few reforms ... but the sense is that the implementation has not been as strong as the reforms," said Cheryl Gray, co-author of an anti-corruption survey of former communist countries in Eastern Europe and Central Asia.

"There's also a strong sense that institutions of accountability and of checks and balances have deteriorated somewhat over the last few years in Russia," Gray added.

Russia, and a number of other former communist countries in the study, concentrated on stabilizing their economies after Russia's 1998 financial crisis and put off reforming their justice systems until now, she said.

Perhaps the most well known of controversial Russian judicial proceedings this year is that of oil company YUKOS, where a court-appointed administrator asked the court to put the company into receivership.

YUKOS's main shareholder called Tuesday's creditor vote to declare YUKOS bankrupt "absurd" and challenged the court-appointed administrator's assessment of the company, which was crushed by $33 billion in back-tax claims that were widely regarded as punitive.

Gray said a separate World Bank survey of companies' perception of judicial trends in Eastern Europe and Central Asia showed Russia at best in the middle of the pack and at times near the bottom in rankings.

About 20 percent of respondents in Russia said courts were honest, 40 percent said courts enforce rules while 30 percent said courts were affordable, but only 10 percent said the justice system was quick.

"Russia is not the worst and its not the best on the indicators we have on the judiciary," she said.

The World Bank is now working on a major project to support Russia on judicial reform and Moscow is investing a "huge amount of money" into federally funded judicial reforms.

"The leadership, particularly in the commercial court, is very forward looking so I think you're going to see a lot of improvement in Russia. They're trying very hard," Gray said.