Russian assembly backs law limiting foreign investments
* Putin seeks to show he is tackling corruption
* New laws bar officials from holding foreign bank accounts
* Russia struggling to stem capital flight
By Timothy Heritage
MOSCOW, Feb 22 (Reuters) - Russian lawmakers gave initial backing on Friday to legislation that would prevent senior officials holding bank accounts or stocks abroad, a move by Vladimir Putin to show he is tackling corruption.
If approved by both houses of parliament and signed by the president, the package of laws will give deputies and other state officials three months to decide whether to close foreign accounts and sell stocks abroad - or quit.
The measures, approved in the first of three readings in the State Duma lower house, are intended by Putin to demonstrate he is trying to clean up Russia's image and reduce the flight of tens of billions of dollars a year in capital abroad.
Critics say the steps planned are cosmetic and populist, and will do little to reduce capital flight. But the Kremlin hopes they will lift Putin's ratings, which sank last year after the biggest protests since he first rose to power in 2000.
"Recent opinion polls ... show nationwide support for the president's initiative," said Irina Yarovaya, a senior member of Putin's United Russia party who heads the State Duma's committee for security and fighting corruption.
"Within three months all officials listed in the law must make a decision - either they continue their work in public office, but close all accounts and settle all matters related to securities, bonds and so on - or leave their state jobs."
Most Russians would not be affected by the laws, which apply to senior state and regional officials, lawmakers, judges, prosecutors, executives at state-owned companies and members of the central bank board.
But it would send a signal to the many voters who are sceptical that Putin is serious about reining in state officials in a country where corruption is widely perceived as rife.
Many Russians regard foreign accounts as a potential place to conceal bribes or other ill-gotten gains, although deputies have repeatedly denied such accusations.
"These bills are aimed at solving one very important task - the fight against corruption," said Garry Minkh, Putin's envoy to the State Duma.
TAKING ON THE OPPOSITION
Under the planned new law, immediate family members aged over 18 would also be obliged to give up their foreign investments, but ownership of real estate abroad is not barred as long as it is declared.
The legislation seeks to take the wind out of the sails of protesters who for 14 months have rallied behind slogans denouncing Putin and the "swindlers and thieves" they say surround the president.
Keeping money in Russia is also being painted as a patriotic duty by Putin, whose rhetoric has often been fiercely anti-Western since he returned to the Kremlin last May.
Central bank chief Sergei Ignatyev said this week that almost $50 billion was sent abroad illegally last year - about 2.5 percent of gross domestic product - and that much of it was controlled by a single group of people he did not identify .
Russia ranks 133rd, alongside Honduras and Guyana, out of 174 states in Transparency International's 2012 Corruption Perception Index. It is under particular international scrutiny as it chairs the Group of 20 nations this year and has pledged to push forward the economic forum's anti-corruption agenda.
In a sign of the sensitivity of the issue, a member of Putin's party gave up his parliamentary seat this week after anti-corruption bloggers published documents showing his name on the deeds of three apartments in the U.S. state of Florida .
Vladimir Pekhtin, who had headed the lower house's ethics committee, said the apartments, which have a combined value of about $2 million, were owned by his 35-year-old son Alexei.
It would not be illegal for Pekhtin to own the property abroad but his critics say he did not include the apartments in declarations he made for the State Duma on his income and property holdings.
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