The Concept of Ownership in Current Russian Law

• Author: Yevgeny Sukhanov
• Pages: 102-107

Yevgeny Sukhanov

The Concept of Ownership in Current Russian Law

Introduction

Russia's shift from a communist regime to a market economy has resulted in a fundamental change with respect to how the concepts of property and ownership are understood within different economic systems and how they are expressed in law. To this end, the legislative formulation of the right of ownership has undergone significant changes through the adoption of laws, which now govern these types of legal relations. This evolution can be traced through a series of legislative enactments. The USSR Ownership Act was the first law formulating new approaches to the right of ownership. Subsequently, the federal Ownership Act considerably expanded and developed the approaches of the previous law. Next was the implementation of section 2 of the Fundamentals of Civil Legislation of the USSR and Union Republics Act, which is applicable in the territory of the Russian Federation to the extent that it does not run contrary to new Russian laws. Finally Division 2 was added to the new Civil Code of the Russian Federation of 1994.

During this period of development, the political declarations and statements that were characteristic of the old approach to law-making were abandoned. Instead, new legal concepts and structures were canvassed in the new legislation. This new framework also established a diversity of property rights, which were not limited to the right of ownership. In the federal Ownership Act of 1990, the legislator for the first time abandoned the economic categories of the "forms of ownership" ? a tendency that became more explicit in the rules enacted as the Fundamentals ? and the right of ownership itself became an integral part of a broader concept of rights in rem. Thus, the contemporary civil law concept of real rights ? the right of ownership being the most important right ? was established in law. In essence, this concept reflects a clear distinction between the economic and legal understandings of the relations to which ownership gives rise.

Ownership is understood as an economic or factual relationship subject to legal formalisation. Firstly, ownership implies a human relationship to specific things. Such property is appropriated by one individual, the owner, to the exclusion of all others. Secondly, the concept of ownership also includes the attitude of the owner to the appropriated property, since people treat their own property differently from property belonging to others. The law must therefore address these two critical aspects of the ownership equation: the relations of property owners to third parties, and the owner's power over the property itself.

At the same time, it is important to recognise that the objects of ownership are commodities, which in a free market may include not only things, but also the fruits of work and services. Such objects include commodities of non-material value and the non-material products of creative activity, as well as other rights¹. Civil law relations in these matters can involve not only real rights, but also personal rights ? i.e. obligations ? and exclusive rights ? i.e. patents and trademarks. Even under the heading of real rights alone, the relations one might have to property are not limited to the right of ownership. In other words, a commodity in the economic sense does not always constitute an object of the right of ownership in the law. Only individually determined things form the objects of ownership.

Economic relationships resulting from an appropriation occur in various forms depending on whether the entity that appropriates a thing is an individual, a group or collective, the State, or society at large. Thus there are individual, group, public, and mixed forms of appropriation. These economic forms of appropriation are traditionally called "forms of ownership". A form of ownership is an economic concept, not a legal one. In proclaiming recognition and equal protection of private, public, and other "forms of ownership", subsection 212 (1) of the Civil Code evokes economic categories, not legal ones. The private form of ownership, also in the terms of the Constitution of the Russian Federation, is a concept for appropriation by any private non-state, non-public persons, distinguished in this sense from public or communal appropriation (state and municipal or public ownership)².

The transfer of property under a market economy requires, as a matter of principle, that commodity owners have equal rights of alienation and acquisition in relation to property. Therefore, the principle of equality among all forms of ownership, which is of an economic and not of a legal nature, becomes necessary. However, to provide for the "equality of all forms of ownership" in the legal sense is impossible. For instance, any property, including that which is withdrawn from commerce, may be held in state ownership. The state may acquire such property in ways that are not available to natural persons and legal entities, for example, by way of taxes, duties, seizure, confiscation, and nationalisation. On the other hand, legal entities and public legal bodies are liable for their debts with all their property, whereas individuals benefit from certain exemptions established by law³.

As such, section 212 of the Civil Code mentions only the "recognition" of different forms of property and the equal protection of the rights of all owners, but not "the equality of all forms of property" as provided in the USSR Ownership Act. The equality of private and public owners is manifested through the recognition of equal legal capacity. This equality is further demonstrated by the ability of private owners, both individuals and legal entities, to own any property except property withdrawn from commerce or limited in commerce by law. Such property is not limited either in quantity or value, unless such limitations are established by law for the public benefit. Moreover, the advantages and protection given to public owners under the former legal regime are absent from the new Civil Code.

The right of ownership is the most comprehensive right, giving the broadest legal power over property. Yet ownership is not the only right in rem; there are other more limited real rights, all sharing characteristics with the right of ownership. Firstly, all real rights formalise the relationship between a person and a thing, giving the person an opportunity to use the thing in his own interests without the participation of other persons. Secondly, real...