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My colleague William E. Butler has produced an excellent short examination of what he describes as a "remarkable step taken by the Russian Federation of endowing an individual state corporation with various powers in treaty making, including the right to conclude treaties with foreign states or their departments." William E. Butler, Current Developments: Treaty Capacity and the Russian State Corporation, 102(2) American Journal of International Law 310 (2008). The context is not necessarily a happy one for the ordered world that preceded this sort of activity--where public entities acted like states, and private entities inhabited their own world, and both were disabled from entering into the territory of the other both by notions of seemliness and by the apparently natural and eternal ordering of the law into neat little categories. And indeed, Professor Butler sets the tone early, taking note of a nice (and tone setting) passage from Vaughn Lowe's recent work of comfort for traditionalists, decrying the "tendency at present for international lawyers to write of the growth of [non governmental organizations] and other non-State actors, and of the decline of the nation-State, with the gleeful enthusiasm of a cartoon character sawing off the tree branch on which he is sitting". A.V. Lowe, International Law 290 (Oxford: Oxford University Press, 2007) quoted in Butler, supra, at 310. Mercifully, not all of us are constrained by the honor code of traditional boundaries of international law to preserve those boundaries in the face of a shifting reality in which states increasingly seek to participate in markets as private juridical persons and private economic enterprises are increasingly disposed (and permitted) to exercise those powers once reserved to the holders of territorial sovereignty.

Well, what does a more gleefully enthusiastic reading of Professor Butler's excellent dissection of this new juridical animal reveal? Or, perhaps better put, what is this thing that is proving so annoying if only by reason of its deliberate character of legal mongrel? Professor Butler provides an superb analysis of the creature that the Russian state apparatus intends as neither fish nor fowl. Perhaps it will turn out to be more state than participatory market entity.

Professor Bulter looks at the State Atomic Energy Corporation (Rosatom"), established by Russian federal law on December 1, 2007. Id. at 310. It is a unique creature of Russian law with no exact counterpart in imperial or Soviet law, with origins in a Russian law of 1999 making possible the creation of non-commercial state corporations. Id., 310-311. The mongrel nature of the state corporation is succinctly described by Professor Butler (Id., at 311): its functioning is defined as noncommercial (though whether this characterization would survive analysis under American application of its Foreign Sovereign Immunities jurisprudence would remain to be seen, see Larry Catá Backer, Markets in Infants: The Hague Convention on Intercountry Adoptions, National Reform Efforts in Guatemala and Consumerism in the United States, Law at the End of the Day, December 11, 2007). It is a wholly owned entity of the state, but controls a number of economic and non-economic entities, over which it presumably has control as a shareholder. The management of the enterprise is mongrelized as well--"The management organs are a hybrid of the state unitary enterprise under Russian law and the Russian joint stock company--but without a shareholder meeting." Id. While Professor Butler fears that such an organization presents problems of tracing authority for acts, corporate lawyers might finds the system, like many other exotic systems created by the flexible provisions of many corporate regimes with respect to management (especially of wholly owned concerns), hardly daunting. Moreover, to the extent that the organizational structure makes one unsure, the result might well be to raise the costs of transactions --or shift them down to the operating company level, or to the shareholder (the Russian State) when the stakes are great enough and the Russians willing enough. otherwise, business people will take the sorts of risks that they have taken with odd and perhaps disreputable governments for a long period of human history. Still, Professor Butler is right to warn non-Russian corporate specialists to beware of the challenges posed by the formal governance structures of these entities.

But for all that, Rosatom is especially interesting in one respect. Of the seven such state corporations created, apparently only Rosatom is endowed with treaty making capacity. Id., 311. Professor Butler reproduces Article 14 of the federal law on Rosatom which suggests the public nature of this state "corporation." Id. Professor Butler offers a rationale for the mongrelization--a bad effort at multi-tasking by a Russian state appearing efficient but evidencing otherwise.

Atomic energy and nuclear power are among the most sensitive issues on the planet. Rosatom was created to bridge the chasm between classical state concerns about safety, national security, non-proliferation obligations [though in Russia's case that might be more laughable than real] and the like. on the one hand, and perceptive exploitation of commercial opportunities represented by atomic and nuclear capacity, on the other. . . . Seen another way, Rosatom is the tangible result of a massive reorganization ands restructuring of thew atomic energy and nuclear power branch of the Russian economy.

Id., 311-312. And the attempt at reorganization was meant to conform to market expectations of structure and form. "Given the decision to clothe the restructuring in corporate dress, it could hardly fail to give rise to implications for the law of treaties generally, and the Russian Federation's treaty obligations with respect to this subject matter specifically." Id., 312. True enough from the perspective of the international lawyer--but more importantly the effort to clothe regulation and participation under the umbrella of a non commercial corporation also presents interesting problems of corporate law, especially in the legal consequences of the relationship between the ultimate shareholder (the Russian Federation), the management obligations of the state corporation (however defined), and the operations of the commercial and non-commercial subsidiaries. Of course, to the extent that these operating subsidiaries are confined to Russian territory the Russian Federation can create such garbling as suits them. But to the extent the assets of such concerns can be reached by foreign courts, and to the extent that subsidiary entities are established elsewhere (or operate through local entities elsewhere), then the consequences of the peculiarities of Russian corporate organization will not be entirely under the control of the Russians. At a minimum, the opportunities for veil piercing--and reaching the commercial assets of the Russian federation abroad, might provide a tempting enough insurance policy of sorts for foreigners seeking to do business with Rosatom or its subsidiaries.

More importantly, perhaps, Rosatom is one of a species of concerns that appear to be appealing in post-Marxist regimes seeking the benefits of global economic engagement on Western free market terms without actually giving up all of the control once wielded by central planners and now devolved to the creatures of the state apparatus in more subtle ways. For a discussion, see, Larry Catá Backer, Cuban Corporate Governance at the Crossroads: Cuban Marxism, Private Economic Collectives and Free Market Globalism. Transnational Law & Contemporary Problems, Vol. 14, No. 1, 2005.

For all this interesting material, Professor Butler reserves the bulk of his analysis to ten carefully reasoned consequences of the Rosatom law for Russian law and for application of the law of treaties (a heretofore public law concern) when exercised from out of the peculiar creation of this non commercial corporate enterprise with power to control commercial enterprises and more importantly to assert state treaty making powers. Id., 312-315. These consist of:

1. Russian law was changed to provide essentially, that (private) contracts by state corporations like Rosatom would be deemed to be (public) law treaties. This, in effect, makes sense if one considers that treaties, in the 20th century, were the,selves transformed from public contracts between states to some sort of "higher" law binding on states. The regulatory character of treaties is mirrored by the public character of certain contracts to be entered into by enterprises owned by the state (or really by anyone vested lawfully by the state with such power) reflected in the creation of Rosatom. International lawyers, therefore, might be reaping a whirlwind of their own creation--the way the German Imperial Government reaped the rewards of sending Lenin back to Russia.

2. Rosetam is an "empowered organization." Such organizations are granted treaty making power. But the definition of "empowered organization" is "opaque." Id., at 312. Professor Butler is right to suggest the problems of interpretation but then also suggests that other provisions make a broad interpretation of Article 14(2) reasonable. He also notes that for internal purposes, the sort of treaties which Rosatom may conclude are not defined in the 1969 Vienna Convention. That is true enough--though from the perspective of foreign states seeking enforcement of treaty obligations it may not matter much, except, as Professor Bulter points out, to the effect the categorization may affect the place of such treaties within the hierarchy of Russian law. Id., 313.

3. Rosatom is required to consult with constituent entities of the Russian Federation when treaties under consideration touch on matters within their respective competences.

4. Rosetam's treaties bind the Russian Federation, though the extent and nature of that binding are still to be worked out.

5. Under certain circumstances, empowered organizations like Roseatom may make proposals for the conclusion of a treaty by others and with the permission of the Ministry of Foreign Affairs, may speak with foreign counterparts about such treaties. Id. 314.

6. There are some interesting issues of authority to conclude treaties within the governance structure of these state corporations. Professor Butler suggests that the director general s empowered to decide to execute treaties, but not other officers without appropriate grants of power.

7. Proposals to ratify treaties may be submitted jointly with the Ministry of Foreign Affairs, "although the Ministry may act independently in this respect." Id., 314.

8. State corporations with treaty powers may keep the original of executed treaties in their own archives, with copies to the Foreign Ministry.

9. The state corporation is empowered to publish treaties it concludes--permitting effectively such entities to keep a version of an official gazette. "Since Russian courts are zealous in confirming that a treaty has been officially published and has entered into force as a condition of enforcing any of its provisions, the foreign party dealing with Roseatom has a special interest in ensuring that agreements with it are duly published." Id., at 314-315. That is true enough--if such agreements are treaties,. But contracts? An interesting conflation of contract as treaty and treaty as contract in relation to the dealing of such state juridical personalities. Though, again, it might make sense that treaties (public regulatory) actions are conducted with Rosatom and that contracts are concluded with the operating subsidiaries.

10. The last is the most interesting for me. Entities like Rosatom are empowered "to watch over and monitor the performance of treaty obligations by themselves and by the other party or parties, to report any breaches, and to be involved in developing proposals for a response to violations." Id., 315. In the world that Professor Butler describes, where the differences between contract and treaty is fungible to some extent, and the the state entity empowered to act actually operates through a number of other organizations, the possibilities of delegation and diffusion of this monitoring power are vast. And, as I have suggested else, the regulatory effect of the power to monitor can be greater than and more effective than traditional positive legislation. See Larry Catá Backer, Global Panopticism: States, Corporations and the Governance Effects of Monitoring Regimes. Indiana Journal of Global Legal Studies, Vol. 15, 2007.

Professor Butler has done us a great service in highlighting an interesting wrinkle in the use of the corporate form for mixed purposes--private (participation in the market through ownership or control of economic entities) and public (through the regulatory and treaty making powers with which the central entity is vested).