Russia investment law postponed till 08 - minister

MOSCOW, Nov 8 (Reuters) - Russia will postpone introduction of a law setting ground rules for foreign investment in 'strategic' industries until 2008, a top cabinet minister said on Thursday.

"We will not make it this year although the document is nearly ready," Energy and Industry Minister Viktor Khristenko told a news conference, adding that necessary amendments to subsoil legislation were not yet ready.

Parliament asked the government to submit amendments to the existing subsoil law, which should define strategic natural resource deposits. The new investment law would then apply curbs to exploration of such deposits.

The head of the industry committee of the State Duma lower house of parliament, Martin Shakkum, told Reuters this week that the second reading of the draft law will be handed over to the next Duma when it convenes after an election on Dec. 2.

The Ministries of Natural Resources, Industry and Energy, Economic Development and Trade and the Federal Security Service (FSB) have been involved in drafting the law.

Industry sources told Reuters the FSB wanted the limits on foreign investment in exploration of strategic deposits to apply to existing licences, causing an outcry among foreign investors already working in Russia.

First Deputy Prime Minister Sergei Ivanov, who oversees areas such as defence, promised investors, who welcomed the initial draft, has said that the law would be passed this year.

The Duma passed the draft at a first reading in September, over two years after President Vladimir Putin ordered officials to draw up legislation to define rules on foreign investment more clearly. Investors now fear the draft could be substantially changed under pressure from industry lobbyists, and defence and security agencies, possibly falling victim to an election cycle that runs through to the election of a successor to Putin next March. (Reporting by Darya Korsunskaya; Writing by Gleb Bryanski, editing by Mike Peacock)