Iranian Oil Exchange
                 …Declaration of War?

Russian Law Would Impose Fines for Citing Foreign Currencies
By Sergei Blagov

Moscow (CNSNews.com) - Russian officials and lawmakers could be fined for using the word "dollar" in official business, if a bill currently before parliament passes.

The legislation is seen as part of an effort to stop showing "disrespect" to the Russian ruble. The measure would punish officials for citing economic data in foreign currencies.

The U.S. dollar is widely used in Russia -- not just in official circles but in stores and restaurants as well.

"When speaking in public, including in the mass media, members of the government must not use foreign currency terms ... to give information about the cost of goods, work, services, property, the sums of closed deals, budget indexes at any level of the Russian budget system, state and municipal borrowings, or state and municipal debts," the bill says.

State Duma lawmakers approved the bill 384-0 in a first reading, with one abstention. A companion bill forcing stores to list all prices in rubles passed by 375-2 with one abstention.

Parliament soon will consider the size of fines ministers should pay for using words like "dollar" and "euro" inappropriately. The measure may also be extended to cover the media.

Russian cabinet members strongly oppose the move, however.

"I don't quite understand the purpose or meaning of this legislation," said Deputy Prime Minister Alexander Zhukov, adding that there was no point in banning any mention of the dollar and other currencies when discussing foreign trade or the international economy.

"The absurdity of the bill is obvious, but if it has been adopted in the first reading, it is most likely to be adopted in the second reading too," noted Finance Minister Alexei Kudrin. "And it will mean that next time I will be talking about global GDP in rubles."

The bill is the first major piece of legislation to come before parliament having being initiated by the Public Chamber, a new consultative body set up as a bridge between lawmakers and the broader public.

Public Chamber head Yevgeny Velikhov, a leading nuclear scientist, sent a letter to parliament last month demanding that officials be fined for showing disrespect for the ruble.

He also suggested that the Russian delegation to the Group of Eight summit in St. Petersburg in July present its statistical figures in rubles.

Critics have dismissed the bill as unworkable exercise of misplaced patriotic pride, but the initiative may be part of a broader economic agenda.

"Once there is an oil and possibly natural gas commodity exchange operating in Russia and in rubles, demand for the rubles will only grow and our currency will grow even stronger and have even more respect worldwide," said Boris Gryzlov, speaker of the State Duma.

Russian experts have long complained that Russian crude is unfairly undervalued on international exchanges. President Vladimir Putin in his state of the nation address earlier this month said Russia must set up its own ruble-based oil exchange.

During painful economic reforms in the early 1990s, spiraling inflation forced most Russians to do business in dollars. The habit continues, and today most real estate brokers and car dealers quote their prices in U.S. dollars, while millions of Russians have savings in cash dollars.

The greenback now faces tough competition, however. Putin wants restrictions on trading in the Russian currency to be lifted by July 1, making the ruble fully convertible.

Since the beginning of this year, the ruble has risen nearly seven percent against the dollar, benefiting wage-earners, but disadvantaging millions of Russians with incomes and savings in dollars.