Vanderbilt Journal of Transnational Law

First Page



This Article's primary thesis is that the Soviet Government's decision to permit the creation of international joint ventures in the Soviet Union is a major instrument of the policy of perestroika. As such, the stability and profitability of any international commercial joint enterprise in the Soviet Union is inextricably linked with the fate of perestroika. If perestroika succeeds, the Soviet Union will have a market-oriented socialist economy, fully integrated into the world economy. By virtue of this success, Western investors and entrepreneurs will be in a position to make deeper, more profitable, and more lasting inroads into the Soviet economy. If perestroika fails, however, the honeymoon between Western capitalism and the Soviet economy will be short-lived.

As a secondary thesis, this Article argues that the component of Soviet law, which may be described roughly as Soviet foreign investment law, operates like an iceberg, with the joint venture legislation of 1987 as the tip. The bulk of this body of Soviet law lies buried beneath the surface. Therefore, it would be tantamount to malpractice for any Western attorney, operating solely on the basis of his knowledge of the provisions of the 1987 Soviet Joint Venture Law, to advise a client on Soviet foreign investment law without a substantial familiarity with other aspects of Soviet civil and commercial law, including the areas of enterprise organization, commercial arbitration, labor, tort, banking and insurance, shipping, and conflicts of law.

Accordingly, this Article will paint a composite picture of the foreign investment landscape of the post-1985 Soviet Union. Its montage will highlight the principal landmarks of this inviting landscape; unravel the hidden agenda of Gorbachev's perestroika; assess the efficacy of the many new laws designed to modernize the Soviet economic machine; comment on the new laws governing the various aspects of foreign commercial enterprise operation in the Soviet Union; establish a nexus between the 1987 Joint Venture Law and other relevant domestic Soviet legislation; indicate areas of the Soviet economy that represent potential gold mines for the Western investor; and provide the necessary navigational instruments to guide prospective Western entrepreneurs through the many minefields of modern Soviet foreign investment law.