Soviet-U.S. Joint Ventures: Pioneers on a New Frontier

Western companies were allowed to invest in “mixed” companies in the 1920s until Stalin ordered these companies dissolved in 1930.

Åslund Anders , Gorbachev's Struggle For Economic Reform (Ithaca, NY: Cornell University Press, 1989), p. 15–16.

Aganbegyan Abel , Inside Perestroika (New York, NY: Harper & Row, 1989).

Osnovnye napravleniia ekonomicheskogo i sotsialisticheskogo razvitiia SSSR na 1986–1990 i na period do 2000 goda (Moscow: Moskva izdatel'stvo politicheskoi literatury, 1986), p. 86.

Edict of the Presidium of the USSR Supreme Soviet adopted January 13, 1987, Vedomosti SSR, (1987), No.2, Item 35.

For commentary on and discussion of the Joint Venture Law, see Hobér Kaj , Joint Ventures in the Soviet Union (Dobbs Ferry, NY: Transnational Juris Publications, Inc., 1990); Honkanen Matti , A Successful Joint Venture in the USSR (Hanko, Finland: Hango Kirjapaino, 1990); Golubov G. D. , ed., revised edition, Sovmestnye predpriiatiia, mezhdunarodnye obedineniia i organizatsii na territorii SSSR (Moscow: Yuridicheskaia literatura, 1989); Kashin Vladimir , Rubl' + dollar (Moscow: Molodaia gvardiia, 1989).

Decree of the USSR Council of Ministers adopted January 13, 1987, No. 49, Sobranie postanovlenii pravitel'stva SSSR (1987), No. 9, Item 40.

Voznesenskaia N. , “Sovmestnye predpriiatiia s uchastiem firm kapitalisticheskikh i razvivaiushchikhsia stran na territorii SSSR,” Sovetskoe gosudarstvo i pravo, 1 (1988): 125.

The two-year tax holiday now commences only after a “declared profit.” USSR Ministry of Finance Regulation, No. 226, November 30, 1987, amending USSR Ministry of Finance Regulation, No. 124, May 4, 1987, para. 15.

“Strangled by Red Tape,” The Economist, February 24, 1990, p. 72.

“Big Deals Run Into Big Trouble in the Soviet Union,” Business Week, March 19, 1990, p. 58. Business Week reports that only about 18% of the registered joint ventures are operating.

See Wall Street Journal, March 6, 1990, p. A-12.

Decree of the USSR Council of Ministers adopted on March 7, 1989, No. 203, Biulleten' Normativnykh Aktov Ministerstv i Vedomstv SSSR, 9 (1989): 17–21.

Shmelev , “Avansy i dolgi,” Novy mir, 63/6 (June 1987): 154.

On June 1, 1990, the Soviet Union and the United States concluded a trade agreement, which would grant most favored nation treatment to Soviet products exported to the United States, but President Bush has agreed not to submit this agreement for Senate approval until the Soviet Supreme Soviet passes an emigration law. The waiver of the Jackson-Vanik Amendment, United States Code, Title 19, Section 2432, in December 1990, will not alter this tariff structure until the Senate ratifies the trade agreement.

An area of good potential for joint ventures serving the foreign market is exporting technology from the Soviet Union. As the Soviet Union reduces expenditures for its military-industrial complex, the institutes which previously supported research with military application will devote more time and energy to technology with non-military applications.

The percentages in parentheses refer to the percentage of respondents who mentioned the factor. The percentages equal more than 100% because of multiple responses.

See Conyngham William J. , The Modernization of Soviet Industrial Management (New York, NY: Cambridge University Press, 1982), p. 2.

For an example of one joint venture, the activities of which were “frozen” because of the partners' disagreement on whether to diversify, see Rosten , “Soviet Joint Ventures Riding on Troubled Waters,” Wall Street Journal, May 7, 1990, p. A-14.

Decree of the USSR Council of Ministers adopted December 2, 1988, No. 1405, Sobranie postanovlenii pravitel'stva SSSR, 1989, No. 2, Item 7, para. 4–6.

Customs regulations are considered secret and not available to the general public.

Porter , “From Competitive Advantage to Corporate Strategy,” Harvard Business Review, 65/3 (May/June 1987): 49.

Sound business policy, however, may require more backwards integration than one would expect in the West due to shortages in the Soviet economy.

On August 4, 1990, the USSR Council of Ministers issued a decree, allowing all legal entities under Soviet law to buy and sell foreign currency for Soviet rubles. Decree of the USSR Council of Ministers adopted August 4, 1990. This decree should facilitate the ability of joint ventures to purchase and sell foreign currency at foreign exchange auctions.

USSR Law on Ownership, adopted March 6, 1990, Vedomosti S'ezda Narodnykh Deputatov SSSR i Verkhovnogo Soveta SSSR, 1990, No. 11, Item 164.

RSFSR Law on Ownership on the Territory of the RSFSR, adopted July 14, 1990.

Law of the USSR Supreme Soviet, enacted June 4, 1990, Izvestiia, June 12, 1990.

Decree of the President of the USSR, adopted October 26, 1990, Izvestiia, October 27, 1990.

“Annual Trade With Soviets Could Reach As Much As $15 Billion, Bush Aide Says,” Wall Street Journal, February 8, 1990, p. 3.