The decision, announced Nov. 28, could well force the Salvation Army to relocate its headquarters, move five congregations into home churches and shut down operations that include providing about 6,000 meals a month to the city's homeless and poor.
"In terms of the legal processes, it is the end of the road," said Colonel Ken Baillie, an American who commands the Salvation Army's operations in Russia and four other former Soviet republics.
"We've had registration here for six years. Never a problem. With the new law, we had to re-register," he said, adding that an appeal to Russia's Supreme Court was unlikely.
The appeals court upheld a lower court ruling that the Salvation Army is a foreign-based "military association" and therefore ineligible for registration as a full-fledged religious organization. Under a controversial 1997 law, the registration is necessary for religious groups to function as legal entities with the right to enter into contracts, open bank accounts and hire employees.
According to the most recent statistics from the Justice Ministry, about 60 percent of the religious groups required to register by Dec. 31 have completed the process. Failure to do so could result in court-ordered "liquidation" under a law adopted earlier this year that extended the original deadline by one year.
In addition to the Salvation Army, local congregations of evangelical Protestants and Jehovah's Witnesses across Russia have sought court orders forcing the Ministry of Justice to re-register them after initial denials.
One of Russia's top religious freedom lawyers, Vladimir Ryakhovsky, said he worries the decision against the Salvation Army bodes ill for other minority faiths based outside Russia, including Mormons, Roman Catholics and various Protestant groups.
Ryakhovsky, who has also helped Jewish, Muslim and Old Believer Orthodox communities fight for registration, said Pentecostal Protestant groups typically have the most problems.
"These are big churches and very active. They will have several thousands parishioners, young people, professionals," said Ryakhovsky, adding that in small, provincial towns such a congregation stands out. "Of course, someone doesn't like this. And, often the local [Russian] Orthodox priest will put pressure on the Ministry of Justice."
Leaders of the 80-million member Russian Orthodox Church, the country's most dominant and politically connected faith, consistently deny meddling in the process but, at the same time, vow to vigilantly protect their faithful from what they consider to be dangerous sects.
Of the up to 16,000 religious organizations that must re-register, those affiliated with the Russian Orthodox Church are the most numerous.
Ryakhovsky speculated that if enough of them fail to make the deadline, "there will be a lot of pressure to extend it" a second time.
Aside from the re-registration requirement, other aspects of the 1997 law are causing problems. For example, the head of a religious organization must be a Russian citizen or permanent resident. This requirement means that the foreign bishops of two of Russia's four Roman Catholic Apostolic Administrations--dioceses answerable directly to the pope--cannot register as legal entities.
Both bishops had their initial applications for Russian citizenship denied earlier this year and are now hoping the Holy See can work out a deal through diplomatic channels. A Vatican diplomat in Moscow who asked that his name not be used said Rome has made a formal request to Russian President Vladimir Putin that the bishops be granted citizenship.
Citizenship is vastly preferable to permanent resident status for the highly mobile bishops, because permanent residents in Russia must receive government permission every time they want to leave the country, a process that can sometimes take weeks.
In a telephone interview from his seat in Irkutsk, a Siberian city located five time zones east of Moscow, Bishop Jerzy Mazur said that when he spoke to local officials about becoming a citizen, they "explained that I can achieve citizenship by marrying a Russian woman."
While Catholic officials in Moscow say they are confident the parishes serving Russia's estimated 500,000 Roman Catholics will make the Dec. 31 deadline, they complain that local authorities are often reluctant to issue long-term visas to priests and nuns. The overwhelming majority of the over 400 Catholic clergy serving across Russia's 11 time zones are foreigners.
In some cases, foreigners are required to leave Russia every three months to get a new visa. In Bishop Mazur's Apostolic Administration of Eastern Siberia, the world's largest diocese at 30 times the size of France, the visa requirements are a huge inconvenience, he said.
One of the highest ranking clerics in the Catholic church, Father Stanislav Opiela, general secretary of the Russian Catholic Bishops' Conference, has twice been refused a visa by the Foreign Ministry and is now stranded in Warsaw.
Opiela, a Polish Jesuit who had been living and working in Russia for over eight years, said in a telephone interview from Warsaw that his inability to return to his Moscow home this summer had disrupted the work of the Catholic college he heads and upset plans to launch a religious magazine.
"I would like to be optimistic but it has been going on so long that it is becoming less and less clear what is going to happen," Opiela said.
A Catholic administrator in Moscow said Opiela's predicament was linked to the fact that Opiela's post as general secretary of the Bishops' Conference did not legally exist. The bishops' conference has no legal standing because two of its four bishops are foreigners.
An official with the Foreign Ministry's Department of Arriving Foreigners declined to comment on Opiela's rejections.
With the approaching Dec. 31 deadline and the requirement that nonregistered groups be "liquidated," the next few months are shaping up to be a crucial test period of Russia's commitment to religious freedom and tolerance.
The U.S. government, for one, is planning to keep a close eye on the situation.
In a telephone interview from Washington, Steven McFarland, executive director of the government's Commission on International Religious Freedom, said, "We're looking at early spring" to issue an assessment of the situation in Russia.
McFarland, said the commission, which can recommend possible sanctions to the president, is hoping "international financing and aid will provide a significant degree of leverage, as well as Russia's desire to be regarded as a civilized nation."