This text is translated into Russian by google automatic human level neural machine.
EastRussia is not responsible for any mistakes in the translated text. Sorry for the inconvinience.
Please refer to the text in Russian as a source.

What is a "special regime"?

The joint economic activity on the Kurile Islands is discussed by the head of the Moscow representative office of ROTOBO - Japan Association for Trade with Russia and New Independent States

What is a "special regime"?

Daisuke Saito

Head of the ROTOBO Association in Moscow
At a meeting of the heads of Japan and Russia in December 2016, it was agreed that both sides would begin negotiations on the establishment of a special regime on the four northern islands [Southern Kuriles: Kunashir, Shikotan, Iturup and Habomai islands - note EastRussia] For carrying out joint economic activities there.

What is a “special mode”? There is no clear concrete idea about this, since the planning of the institutional structure was entrusted to further negotiations between the parties. The key point is that this structure will be created by joint forces of Japan and Russia, as well as that it will be created on the basis of an international agreement. What kind of agreement it will be - an intergovernmental agreement or an agreement - this will be decided at further bilateral negotiations. This will take into account the possibility of creating an institutional structure that is not based on either Japanese or Russian legislation, and does not harm the legal positions of both countries. With regard to the vague vision, the leaders of both countries, perhaps, imagine some kind of special economic zone. Apparently, to solve a complex territorial problem, it is considered necessary that Russians living in the northern territories feel the benefits of cooperation with Japan, and of the coexistence and mutual prosperity of both countries.

The Japanese side has a ready-made scheme according to which the specification of a special regime for conducting joint economic activities and the actual conduct of this activity in the northern territories will lead to the conclusion of a peace treaty and the solution of the territorial problem. But first of all, for the upcoming 2017 year, the Japanese side should hurry to discuss with Russia questions on the creation of a special regime.

In addition, the Japanese side intends to implement projects on The eight-point cooperation plan, About which the heads of Japan and Russia agreed at the last meeting, and concretize the subsequent economic projects. Japan intends to form a trusting relationship with Russia through the sustainable implementation of each agreement.

Is there a special economic zone (SEZ)?
As for joint economic activities in the region of the four northern islands, in 1998, at the suggestion of the Russian side, a Japanese-Russian intergovernmental commission was established. The commission considered the possibility of creating hatcheries for the cultivation of sea urchin and mollusks in this marine area. But the parties could not resolve the differences over the applicable legislation, Japanese or Russian, and as a result did not reach a final agreement. To address these issues, the Japanese side relies on a framework agreement on fishing in the sea area (official name: the "Agreement between the RF Government and the Government of Japan on some issues in the field of marine living resources of the fishing"), signed with Russia in 1998 year. The agreement stipulated that should not be considered (this agreement and in accordance with the activities and measures of the agreement) as "prejudicial attitudes and points of view of any of the parties on the issues of mutual relations," while recognizing fishing Japanese fishing boats in the sea District. Thus, the problem of jurisdiction over these territories was postponed "in the long run". This agreement aims to ensure that Japanese fishermen can safely engage in fishing for living resources in the maritime area around the northern territories, avoiding the risk of seizure of vessels or inspection.

The Japanese government intends to apply the same framework also on a "land" basis, adhering to the principles of not damaging the legal positions of Japan. However, between sea and land there is a huge difference in the volume of movement of people. On land, incidents and accidents occur much more often. This will complicate the work on the specification of institutional structures to create a special regime.

If Japan recognizes Russian jurisdiction over the northern territories, and Japanese enterprises operate in accordance with Russian law, it will turn out that Japan itself will reject its position that the northern territories are the original territories of Japan. In this regard, the special regime provides for such a framework in which Japanese enterprises will conduct economic activities without recognizing the administrative jurisdiction of Russia in the northern territories. If the creation of a special economic zone is envisaged, then an intergovernmental agreement or treaty must be concluded between Japan and Russia, according to which a special joint management company will be established.

As for the question on creation of special economic zones in the Kuril Islands, including the northern territories, the deputy chairman of the Russian Federation - the plenipotentiary of the Russian President in the Far Eastern Federal District Yuri Trutnev expressed the need to postpone the resolution of this issue, as this will prevent the development of negotiations on joint Economic activity in the northern territories. Russia, striving to create a new type of SEZ - the territory of advanced socio-economic development (TOP) in the Kuril Islands, including the northern territories, independently conducted the relevant work. It was planned to attract investments to the areas of fish processing, tourism, development of natural resources, etc., giving tax breaks to companies participating in the TOP (For further details see "Compass Russian Far East." - "The creation of a new type of SEZ in the Kuril Islands», № 11 , 2017, "Monthly Report"), but from the second half of last year the plan was revised due to low prospects of feasibility.The joint economic activities are planned in the areas of tourism and fish processing.
Mr. Gabuev from the Carnegie Moscow Center commented in the Vedomosti newspaper: “A zone close to the new type of SEZ will be created in the Kuril Islands.”

Joint economic activity - will it become the key to solving the territorial problem?
The Japanese government explains that it is discussing with the Russian side issues on joint economic activity in the northern territories with the fundamental premise of not harming Japan's legal positions. The Japanese side intends to create such a society that will allow the Japanese and Russians to co-exist and flourish in the northern territories, conducting joint economic activity there, in order to find the key to solving the territorial problem.

However, it is not clear how the joint economic activity on the four northern islands is associated with the return of the northern territories of Japan and the conclusion of a peace treaty. At the last meeting of the leaders of Japan and Russia, the Russian side apparently made greater emphasis on economic cooperation that contributes to the economic development of its country than on the solution of the territorial problem, indicating a difference in positions with the Japanese side. It is also unknown, under whose sovereignty, Japanese or Russian, joint economic activity will be conducted. There are many problems, including the problem of security. They say that in the northern territories joint economic activities will be conducted in a "special regime". But if Japanese enterprises have to be guided by the applicable Russian legislation, this could mean that Japan will recognize Russia's sovereignty over the northern territories.

When Japanese enterprises operate on the four northern islands, they can formally remove themselves from the problem of sovereignty by entrusting a number of government functions to the joint management company. The task of infrastructure development will also arise.

As was stated in the statement of the heads of Japan and Russia: "Joint economic activity will be an important step towards the conclusion of a peace treaty", that is, this activity was associated with a territorial problem. Prime Minister Abe said: "We can solve this problem with Vladimir." President Putin also said that in the situation with the Kuriles and Japan it is harmful to determine the terms. At the last meeting, the leaders of both countries stated that they intend to solve this problem on their own. It can be said that this indicated a kind of deadline and the purpose of solving the problem.

The key word is "step by step". To solve complex problems, such as territorial problems, first of all, it is necessary to form trust relations between both parties, for which the negotiations and related events or projects need to be implemented steadily, step by step. As the proverb says, "Hurry slowly." Problems solved in a hurry can not be solved in a way that would suit all interested persons. The formation of trust relationships will naturally lead to the solution of the territorial problem. Such a message was received following the last meeting of the leaders of Japan and Russia. Japan and Russia took the first step towards concluding a peace treaty. This is a chance for the transformation of the four northern islands into Japanese-Russian islands.

September 17: current information on coronavirus in the Far East
Digest of regional events and latest statistics