RUSSIAN CURRENCY DECREE LITTLE COMFORT FOR VENTURES

RUSSIAN CURRENCY DECREE LITTLE COMFORT FOR VENTURES

At first glance, a new decree issued by Russian President Boris Yeltsin appears to solve the crucial problem of currency exchange most joint ventures face here.

Under the decree signed Dec. 30, which the Russian Parliament has until the end of the month to disavow, foreign and local enterprises could sell hard currency at a new rate equal to 50 percent of the tourist rate.The tourist rate now varies with each bank, but on average stands at 110 rubles to the dollar.

Compared with a past commercial rate of 1.8 rubles to the dollar, the legislation is a blessing. However, the decree would also force joint enterprises to sell some 40 percent of gross export receipts to the state. In the past, only Soviet enterprises were required to make such sales.

While not all goods would be subject to forced sales - a comprehensive list of which goods are not exempt is promised by the end of the month - it still would stand as a deterrent to future joint ventures.

"It's a potential deterrent to joint ventures, but the legislation doesn't fully answer the question of joint ventures," said James Mandel, an attorney with LeBoeuf, Lamb, Leiby & MacRae.

In addition, the decree states that all enterprises, irrespective of ownership, would be required to sell 10 percent of total hard-currency receipts at an unspecified "market" exchange rate, to "provide for the formation of a currency stabilization fund."

In principle, the decree aims to crack down on offshore accounts and ''phony" joint ventures, often set up by Soviet enterprises to circumvent forced currency sales while creating a fund to support the ruble, but Mr. Mandel added, "there are ways to get around it, and there will be leakage."

There are also contradictions. For example, pending Russian foreign investment legislation would exempt joint ventures from forced sales. Such contradictions have most Westerners here shaking their heads, all the while carrying on with daily business activities.

"The legislative process here is a total mystery," said George Marquart, managing director of Svetozor, a joint venture between Polaroid Corp., Cambridge, Mass., and three enterprises within the former Soviet Ministry of Atomic Energy and Industry, now under Russian jurisdiction.

"What is a law? what is not a law? I don't read them anymore; my time is too valuable. In the past, I was scared every time a new one was passed, but they don't mean anything," he added.

In fact, many ventures here share Mr. Marquart's opinion, opting to do business legally in a Western sense but not paying attention to the daily onslaught of legislative contradictions.

"Here, the legislative process is just the opposite of that in the West: The law is made first, and then later debated. You know what you want to do, but you don't always know what you can do," said Winfried Scheidges, commercial director of MosTransEurope, a joint venture between Big Air Freight Line, a Dutch shipping company, and Mosavtotrans, a massive Moscow trucking company.