 
 RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/ACC/SPEC/RUS/29 
20 January 2003 
 (03-0288) 
Working Party on the 
Accession of the Russian Federation Original:   English 
 
 
 
ACCESSION OF THE RUSSIAN FEDERATION 
 
 
 Attached are the consolidated list of comments, proposals and requests for specific 
information or clarification, together with Russi an Federation responses, relating to issues in the 
revised draft of the Working Party Report on th e Accession of the Russian Federation to the WTO 
(document WT/ACC/SPEC/RUS/25/Rev.1 refers) retain ed in December 2002 for further work at the 
January 2003 session of the Working Party.  
 
 WT/ACC/SPEC/RUS/29 
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General Comments 
For each and every chapter it is important to have  clear information on which policies have a trade 
impact, and if the impact is negative, what has been or will be done to rectify the situation. 
We place most emphasis on the descriptions of ho w measures today comply with WTO-obligations. 
On historical data, we think focus should be on  the areas where members earlier have pointed to 
problems and how these problems have been resolved in a WTO consistent manner. 
Each chapter should be organized in such a way that   for each separate issue information, questions 
and comments  should be  placed  together consecutively. Given the problem of implementation of legislation at the sub-federal level, information is also 
needed in the different sections on the practical measures used to implemen t legislation and uniform 
understanding and practice of rules throughout the Russian Federation. 
We take note of supporting materials that the Russian  Federation (Russia) has agreed to provide to the 
Working Party and flag outstanding issues, i.e., wh ere Russia has not yet concluded its efforts to 
implement WTO provisions or where Russia’s responses have not fully addressed Member’s concerns.  We have also noted issues where we se ek commitments from Russia, and will be prepared 
to provide drafting suggestions at an appropriate opportunity. 
We believe that an adequate factual basis for th e draft Working Party report can be developed by 
taking the following approach:   - Each section should describe Russia’s regime in that sector and include information on 
legislative status; 
- Russia should respond to the member’s concerns, and ensure that the views of Members can 
be recorded in the text. 
- Statements that suggest WTO consistency or l ack of WTO relevance for the concerns should 
be deleted;. 
 
Once the factual basis for the draft Working Party report is developed, Members can then work to 
refine the text of the draft. 
3-7 Introductory Statements 
5 What is meant by "institutional" integra tion of the RF in the world economy.  We 
would hope for a broader inte gration, and request an explanation for the need to 
qualify the statement.  
Russian Federation Response  
 The past two decades saw the beginning of a substantial transformation in the way the international economy works. The world entere d a new economy where the term globalization 
has been used to capture the international dimens ions of this transformation. There are exciting 
and important developments in the evolution of the international trade regime restructured and 
revitalized by the Uruguay Round results. Ch anges in the way the global and domestic 
economies now function and interact with each other are to be reflected in domestic policy 
developments and have profound implic ations for the Russian Federation. 
 
The main ingredient of such implications is a set of programs, policies and priorities that have 
as their central goal rendering the Russian Federation a better, more competitive and 
rewarding place in which to work and do business.  
Trade policy and trade negotiations played a critical role in changing attitudes and priorities in 
the Russian Federation in past decade. One of su ch priorities is to accede to the World Trade 
Organization. The Russian Federation is already a member of other international institutions  WT/ACC/SPEC/RUS/29 
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having competence in world eco nomy areas such as the International Monetary Fund and the 
World Bank.  Growing financial interdependence of national economies, global integration of markets and 
linkage between trade flows and investment urged the Russian Federation to adjust its trade, 
financial and investment legislation. 
8-10 ECONOMY, ECONOMIC POLICIES AND FOREIGN TRADE 
Economic Policies - Fiscal and Monetary Policies 
8-10 This section is more of  an introductio n on the section on Economic Policies than an 
introduction just on  ”fiscal and monetary policies”.  Taxation has been taken out of this secti on, however there should be reference to 
developments in the taxation system given the important part it plays in economic 
policy. A stable and predictable taxati on system is of vital consequence for 
commercial activity. There should also be an indication of where specific taxation issues are to be found in the report. 
8 In comparison with the first draft of the WP report, we note that Russia has dropped 
its previous reference to the introduction of  a new Tax Code in 1998 and amendments 
to the Code have brought Russia’s taxa tion regime into compliance with WTO 
requirements. 
If there are important WTO aspects of the new Tax Code, will Russia please provide 
information elsewhere in the draft WP report on: - how Russian legislation prior to the enactment and amendment of the Code 
was not in conformity with WTO requirements; 
- how the enactment and amendment of the Code addressed lack of conformity 
with those provisions. 
- We seek the inclusion of this information in the draft Report. 
Also absent from the second draft are references to concerns raised by Members over discrimination in domestic taxation, including: - whether taxation at sub-federal level was similarly consistent with WTO 
requirements; 
- Responses by Russia to these concerns w ill need to be included in the draft 
Report. 
8-10 Russia should provide a concise description of its fiscal and monetary policies, along 
the lines of that provided by other accession applicants, e.g., including  a brief description of the forms of taxation of indivi duals. property, firms, inheritance, etc.; 
policies on wages, consumption, and infl ation; recent developments on the state 
budget; the objectives and main policy instruments of monetary policy and central bank status and functions. 
11-26 - Foreign Exchange and Payments System 
11-26 Russia should provide a dditional, updated informa tion on the preparation and 
implementation of reforms affecting the system of foreign exchange and currency 
controls.  Can Russia confirm that all cu rrency-related measures listed in Table 1 
have been authorised by the IMF? 
11-26 -  Good that the section includes more information, however it could also be 
shortened by eliminating reiteration on the prepayment issue and on the 
elimination of the 1 pct tax to be enforced by 1.1.2003. 
- We welcome the reference to the re form under way to improve currency 
regulation and now before the Duma We expect changes to this chapter to 
reflect changes in legislation. WT/ACC/SPEC/RUS/29 
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- Need updates on currency regulation and c ontrol, especially the restrictions 
without IMF approval. 
- On the system of prepayment with 100 per cent deposit  that comes into force 
if the prepayment is done for purchases/ imports that arrive in the RF more 
than 90 days after date of payment. The 90 day clause can lead to a real 
discrimination of foreign suppliers, especially of some capital goods. Our 
earlier remarks are reflected in the text.  Indication of work on alternative  and less trade restrictive measures to take care of the Russian concerns of currency flight should be made.  We  urge that this system be changed. 
- Given the objective of ”debureaucratiz ation” of the economy referred to in 
para 8, we would  point out that the issu e of  permit in table 1 V. page 114  
(concerning restrictions on the transfer  of foreign currency as an advance 
payment for import by residents) is an example of bureaucracy and not of  the opposite. An example and question: why do you need a notarized copy of foundation documents together with notarized copy of state registration 
document when the former is the basis for receiving the latter in the first 
place? 
11-26 Please indicate which of the exchange r estrictions in this section have not been 
approved by the IMF as consistent with Russia’s obligations under Article VIII. 
11-26 This section represents a marginal improvement on the first draft of the Working 
Party report.  While Russia has shown flexib ility in relation to the removal of some 
restrictions, we still seek greater clarificati on in relation to policies in this area and 
stronger commitment language to address me asures not in conformity with WTO 
provisions. 
- In particular, there is a need for gr eater clarity in relation to existing 
exchange restrictions.  It is stated in paragraph 12 that only six exchange 
restrictions remain in place.  In Table 1, these are listed as:  three restrictions associated with “S” type ruble account operations of non-residents; one restriction on non-residents “N” type ruble accounts; one restriction on the 
transfer of foreign currency as an advance payment for import of residents; 
and one restriction on “operations with residents of members”.  In the remainder of this section of the WP report, however, there is also reference to two additional foreign exchange restrictions.  These are:  (i) a tax of one percent on the amount of foreign currenc y cash acquired by physical persons; 
(ii) a requirement for resident legal entities for the mandatory sale of 50 per 
cent of currency revenue received from non-residents. 
- We seek amendment of this section of the draft Report to ensure greater 
transparency in the enumeration of the full range of existing restrictions.   
- We also note that Russia continues to use various arguments in an attempt to 
justify the continued use of such exchange restrictions.   
- We do not accept that such restrictions, which clearly target directly or 
otherwise adversely affect current transactions in a substantial way, are the only means available, appropriate means or preferred means for addressing capital flight or illegal capital flows.  We support Members’ calls for Russia to address these problems by means other than the currently applied 
restrictions affecting current transactions. 
11 Please indicate on what basis the CBR deci des which capital transactions are subject 
to "regulative procedures," i.e., whether they will require permission of the CBR, 
notifications to the CBR, or can be conducted freely.  WT/ACC/SPEC/RUS/29 
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12 While it states that ". . six exchange restrictions nevertheless remained in place (Table 
1),"  the list of restrictions does not appear to include the 1 percent tax on foreign exchange or mandatory surrender requirements. 
12 At paragraph 12, it is not correct to st ate that “the six exchange restrictions 
exclusively covered transactions involving capital flow which were not regulated by 
the WTO Agreement”.  In particular: 
- The requirement to deposit (Table 1: V), in domestic currency in an 
authorised bank, an amount equal in value to the foreign currency purchased for the purpose of prepayment for purch ase of imports, is inconsistent with 
the non-discrimination provisions of  GATT Article III and the requirement 
under GATT Article XI and Article 4 of the Agriculture Agreement to eliminate unjustifiable restrictions on importation. 
- Furthermore, the nature of the thr ee restrictions on so-called “S” accounts 
(Table 1) and “N” type restrictions require clarification in order to assess their conformity with relevant WTO provisions.   
We seek the inclusion of this information in the draft Report. 
13 Russia will need to provide further informa tion in relation to the “further steps” being 
taken by the CBR to “improve the system of control on timely and full transfer of export revenue returned to the country and on payment of goods which were 
imported into the territory of the Russi an Federation on prepayment conditions.  
Furthermore, we seek clarification as  to how the CBR will strengthen control 
measures to “enable the detection of fi ctitious foreign exchange operations”. 
 We seek the inclusion of details in the draft Report 
15 Please address the disposition of the 1 percent foreign exchange purchase tax, 
whether it was eliminated on January 1, 2003 as foreseen, or if there are other 
intentions. 
15 We welcome news that the tax of 1 pe r cent on the purchase of foreign currency in 
cash may be cancelled from 1 January 2003.  
- We seek inclusion in the draft Report of appropriate commitment language 
that Russia will eliminate such measur es by the date of accession and not 
have recourse to them after accession. 
16 At paragraphs 16 and 23, Russia discloses th at the mandatory requirement applicable 
to exporters of products from Russia to conve rt 50 per cent of their foreign exchange 
earnings into domestic currency will remain in force.  We shar e the concerns of 
Members raised in paragraph 22 of the draft Report. 
- We seek the inclusion in the draf t Report of appropriate commitment 
language that Russia will eliminate su ch measures by the date of accession 
and not have recourse to them after accession. 
19 & 22 Para 19 and 22:   Drafting at a later stag e will have to include reference to Members’ 
concern that these measures have not been approved by the IMF, were not consistent 
with Article VIII obligations, and have a practical and ne gative impact on imports as 
follows: 
- the 1 percent tax on foreign exchange is a de facto  additional charge on 
imports;  
- mandatory surrender requirements effectively increase import transaction 
costs; and 
- import prepayment requirements requires importers to tie up funds that could 
be used for additional imports and increases administrative burdens for importation. WT/ACC/SPEC/RUS/29 
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21 At paragraph 21 it is disclosed that residents are required to deposit, in domestic 
currency in an authorised bank, an amount equal in value to the foreign currency purchased for the purpose of prepayment for purchase of imports. We agree with the concerns outlined in paragraph 22 that this requirement is 
inconsistent with the non-discriminati on provisions of GATT Article III and the 
requirement under GATT Article XI and Artic le 4 of the Agriculture Agreement to 
eliminate unjustifiable restrictions on importation.  We seek the inclusion in the draft Report of appropriate commitment language that Russia will eliminate such measures by the date of accession and not have recourse to them after accession. 
At paragraph 21, it is stated there are no restrictions on residents to buy foreign 
currencies on the domestic exchange mark et to meet their payments on current 
transactions. The statement at paragraph 21 that there are no restrictions on residents to buy foreign currencies on the domestic exchange market to meet their payments on 
current transactions appears to be contradi cted by references to measures mentioned 
elsewhere in this section of the draft Repor t and requires appropriate clarification.  
Could Russia please explain: - What is the criterion of residency that is applied? 
- What is the rationale and WTO justification for excluding non-residents from 
purchases of foreign currencies on the domestic exchange market to meet 
their payments on current transactions, when residents are not excluded? 
Is it actually the case that non-residents hol ding Russian currency may be impeded 
from engaging in the importation of goods or services into Russia on account of being forbidden under Russian law to exchange Russian currency for foreign currency on 
the domestic exchange market? 
22 In paragraph 22, Members raise a number of issues and request Russia to undertake 
appropriate commitments.  This request is not adequately addressed in the remaining 
paragraphs of this section of the draft Report. 
23 Assuming that the draft legislation on fore ign exchange is sufficiently advanced to 
provide certainty, please describe its conten t and status, including the provisions to 
reduce the level of mandatory resale of foreign exchange to 30 percent 
23 suggests the following addition at the end of para 23: 
 "Nevertheless, some members pointed out th e cases with a L/C was not readily issued 
by the Russian Banks due to insufficien t credit risk management capability and 
expensive cost of opening a L/C.  Ther efore those members requested the Russian 
Federation to eliminate the relevant regulation." 
24 Please clarify that the process for application for a permit before the end of the 90 day 
period is outlined in Table 1. 
24 suggest the following addition at the end of para 24: 
 "Nevertheless some members pointed out that it was extremely difficult, in fact, to be 
able to obtain permission from the CBR within 90 day period from the advance 
payment because of many documents require d for applying for extension, especially 
reference letters from the Tax Authority and the authorized banks of the Russian 
Federation (shown in Table 1-V).  Theref ore those members requested Russia to 
eliminate the relevant regulation as soon as possible." 
25 Regarding paragraph 25, while the CBR do es not require non-residents to complete 
delivery of goods within 90 days from the date of advance payment, the requirement  WT/ACC/SPEC/RUS/29 
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of an additional import permit could unnecessarily inhibit trade.   
- We request information fr om Russia on the policy objective underpinning an 
import permit in such circumstances, wh ether such a permit is considered to 
be ‘automatic’ or ‘non -automatic’ as defined in the WTO Agreement on 
Import Licensing Agreement, and how th e rules and procedures pertaining to 
the provision of this permit comply with  relevant aspects of that Agreement. 
26 After para 26:  Please confirm that Ru ssia will eliminate these foreign exchange 
requirements upon accession. 
26 suggest the following  addition at the end of para 26: 
 "[While appreciating the updated informa tion, on the draft amendment law "On 
Currency Regulation and Currency Control", some members requested the Russian representative to provide the more-detailed information on the exceptional situations 
where restriction will be imposed.]" 
Russian Federation response : 
 
Provisions of the Draft Federal Law  
“On foreign exchange control and foreign exchange regulation”  
 In accordance with the plans of the Governme nt (Draft Federal Law “On foreign exchange 
control and foreign exchange regulation”) current exchange transactions are to be free. The 
following operations are understood in the dra ft law as current exchange transactions:  
 a) settlements (transfers of funds) in connectio n with exports and imports of goods, works, 
services, information, intellectual property resu lts, including exclusive rights on them, 
under condition that the period of time betw een the date of payment and the date of 
factual entry to the customs territory of th e Russian Federation or export from the 
customs territory of the Russian Federation  of goods, works, services, information, 
intellectual property results, including exclus ive rights on them, do not exceed 180 days; 
b)  settlements (transfers of funds) in connect ion with payments of interests, dividends and 
other incomes arising from banking accounts and deposits, credits, securities 
representing equity participation in commercial organizations and from other types of 
investment activities; 
c)  settlements (transfers of funds) rel ated to non-commercial transactions; 
d)  settlements (transfers of funds) in foreign exchange and in currency of the Russian 
Federation connected with mandatory paym ents to the state in accordance with 
requirements of federal laws and legislation of foreign countries (taxes, fees, duties and 
other similar payments). 
 Residents and non-residents carrying out fore ign exchange operations in the Russian 
Federation have the rights to: - be acquainted with inspection acts issued by  the bodies and agents of currency control; 
- appeal actions and decisions of bodies and agents of foreign exchange  control and 
relative officials in accordance with the ord er, set by the legislation of the Russian 
Federation; 
- require in accordance with the order, set by the legislation of the Russian Federation, 
compensation for damages resulted from ille gal actions of bodies and agents of foreign 
exchange control and its officials”. 
 Capital operations are not restricted with the ex ception of some operations, provided for in WT/ACC/SPEC/RUS/29 
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Articles 8 and 9 of the draft law, which can be introduced with a view to avoid: 
- considerable decrease in gold and foreign currencies reserves; 
- sharp fluctuation of exchange rate of currency of the Russian Federation; 
- weakening of balance of payments stability. 
 
The draft law provides that capital operations are, firstly,  the operations between residents and 
non-residents of the Russian Federation (ex cept credit institutions) regulated by the 
government of the Russian Federation, and namely: - delaying payments by non-resident to resident  for more than 3 years  related to export 
of goods indicated in Chapters XVI, XVII and XIX of the Commodity Nomenclature of 
external economic activity of the Russian Fed eration is granted in the order set by the 
government of the Russian Federation. This order provides the requirement of reservation of the amount not exceeding 50% of the volume of capital operation for the executive period of this operation, but not longer than for 2 years; 
- delaying payments by non-resident to resident  for more than 5 years and longer period 
related to export credits to non-resident s for construction and contractor works 
financing outside the Russian Federation is granted in the order, set by the government of the Russian Federation; this order fo resees reservation requirement for the sum not 
exceeding 50% of the amount of mentioned operations for the executive period of these operations, but not longer than for 2 years; 
- delaying payments by non-resident to resident in the form of export credits or granting 
commercial credits to non-resident in the form of advanced import payments (prepayments) for more than 180 days, with two above mentioned exceptions, are carried out in the order, set by the Govern ment of the Russian Federation; this order 
foresees reservation requirement for the amo unt not exceeding 50% of the volume of 
mentioned operations for the executive period  of these operations, but not longer than 
for 2 years; this reservation requirement is not applied to export credits or advanced 
import payments for the period up to 1 year in case of issuing relative guarantees, including risk insurance agreements on goods supply or money remittance; 
- settlements (transfers of funds) related to acquisition by residents from non-residents of 
shares in charter capital or investment fund of legal entities, or on the basis of 
commondite agreements are carried out in th e order, set by the Government of the 
Russian Federation in coordination with the CBR; this order can foresee: requirement 
to open an account with an authorized bank; setting of the account regime; reservation requirement for the amount of foreign ex change operation not exceeding 100% of its 
volume for the executive period of the op eration, but not more than for 60 calendar 
days before the date of operation. 
 Secondly , according to the draft law restrictions ca n be introduced for the following capital 
operations between residents and non-residents, regulated by the CBR:  - resident’s credits and loans to non-residents, granting, both, in foreign exchange or in 
Russian currency, are carried out in the order, set by the CBR; this order can foresee 
reservation requirement for the amount of foreign exchange operation not exceeding 
100% of its volume for the executive period of the operation, but not more than for 60 calendar days from the date of operation; besides, requirement to open accounts with authorized banks and the account regime requirement can be set up; 
- non-residents credits and loans to residents, gr anting in foreign exchange or in Russian 
currency, are carried out in the order, set  by the CBR; this order can foresee 
requirement to open accounts with author ized banks, the account regime requirement 
and reservation requirement for the amount  of foreign exchange operation, not  WT/ACC/SPEC/RUS/29 
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exceeding 20% of its volume, for the period not exceeding 1 year; the CBR can 
determine the currency (Russian or foreign ) for settlements between residents and non-
residents for operations with external securities in general or with some particular types 
of external securities; 
- operations with external securities, including settlements (transfers of funds) related to 
transfer of external securities (rights certified by external securities) are carried out in 
the order, set by the CBR; this order can provide the requirement for reservation for the amount, not exceeding of 100% of the volume of the mentioned operation for the period not longer than 60 calendar days prio r to the date of performance of foreign 
exchange operation, or the requirement fo r reservation of the amount not exceeding 
20% of the volume of the operation for a period not longer than 1 year; 
- fulfillment of the commitments on external secu rities is carried out in the order, set by 
the CBR; this order can provide the requirement for the opening of accounts with authorized banks, establishment of account regime;  
- operations related to guarantees by residents of rights certified by external securities 
are carried out in the order, set by the CB R; this order can provide the requirement for 
reservation of the amount not exceeding of 100% of the volume of the operation for a period not longer than 60 calendar days pr ior to the date of performance of the 
operation;  
- settlements between residents and non-residents for operations with domestic securities 
are carried out in the currency of the Russ ian Federation, unless otherwise established 
by the CBR in general or in respect of particular types of domestic securities; 
- operations related to the acquisition of rights on domestic securities (by non-residents 
from residents or by residents from non-residents), including settlements (transfers of funds) related to the transfer of domestic secu rities, are carried out in the order, set by 
the CBR; this order can provide the requirement for reservation of the amount not 
exceeding of 20% of the volume of the operation for a period not longer than 1 year; 
- operations of credit organizations, with the exception of banking operations, are carried 
out in the order, set by the CBR; this or der can provide the requirement for reservation 
of the amount not exceeding of 100% of the volume of the operation for a period not longer than 60 calendar days prior to the date  of  the operation, or the requirement for 
reservation for a period of not more than 1 year of еру amount not exceeding of 20% of 
the volume of the operation. 
 The above mentioned reservation requirements shall be introduced by the CBR upon agreement with the Government of the Russian Federation which shall, within 15 working days, 
consent to the proposal of the CBR for the introduction of the reservation requirement or 
provide a motivated refusal to such consent. Th e operations of physical persons-residents with 
external securities, including settlements (transf ers of funds) related to the acquisition within 
one calendar year of external securities (rights ce rtified by external securities) for the amount 
not exceeding 75 000 USD are carried out without restrictions. 
 
Further the draft Federal law provides that in case of export credits and import advanced payments for the period not longer than 180 days, residents have to: a) ensure obtaining and placement on acco unts opened in authorized banks export 
earnings in foreign exchange or in Russian  currency, resulted from delivered to non-
residents goods, fulfilled works, rendered se rvices and transmitted information and 
intellectual property results, including exclusiv e rights on them in terms, provided in 
contracts;  
b) ensure repatriation to the Russian Federati on of funds from non-residents transfered by WT/ACC/SPEC/RUS/29 
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residents in advance for goods, works, inform ation and intellectual property results, 
including exclusive rights on them, which we re not delivered to the customs territory of 
the Russian Federation by non-residents. 
 
In case of capital residents have to: 
a) ensure within the terms provided in cont racts obtaining and placement on accounts 
opened in authorized banks their export ea rnings in foreign exchange or in Russian 
currency resulted from delivered to non- residents goods, fulfilled works, rendered 
services and transmitted information and intellectual property results, including exclusive rights on them, unless otherwise provided be this draft law; 
b) ensure within the terms provided in contract s repatriation to the Russian Federation of 
funds from non-residents transfered by residents in advance for goods, works, 
information and intellectual property results, including exclusive rights on them, which 
were not delivered to the customs territory of the Russian Federation by non-residents, 
unless otherwise provided be this draft law. 
 
In accordance with the draft Federal law non-resi dents can freely buy foreign exchange on the 
internal exchange market of the Russian Fed eration for  Russian currency received as a result 
of their current operations. Non-residents can also  freely buy Russian currency on the internal 
exchange market of the Russian Federation fo r foreign exchange received from their current 
operations.  
 The CBR sets the order for buying and selling fo reign exchange by residents and non-residents. 
This order can provide requirement for open ing  accounts with authorized banks and 
reservation requirement for the amount not exceedi ng 100% of the volume of foreign exchange 
to be bought. This reservation requirement is a pplied for the period not longer than 60 calendar 
days before the date of operation. 
 In case of buying Russian currency the reservation requirement provides  reservation for the amount not exceeding 20% of the volume of Russia n currency to be obtained for the period not 
longer than 1 year before the date of operation. 
 
The draft Federal law establishes that mandatory sale by resident s of a part of their export 
earnings in foreign exchange is set by the CBR;  the level of mandatory sale can not be higher 
than 30. The foreign exchange due to residents from non-residents in accordance with export 
contracts provided delivery to non-residents of goods, fulfillment of works, rendering services 
and transmission of information and intellectual property results, including exclusive rights on 
them, are subject to mandatory sale, except:  - foreign exchange earnings received by the government of the Russian Federation, the 
Ministry of Finance and the CBR for opera tions carrying out by them (or at their 
behalf and/or at their own expense) within the scope of their competences; 
- foreign exchange received by authorized banks  for banking or other operations allowed 
by the legislation of the Russian Federation on banks and banking activities; 
- foreign exchange placed on accounts in ba nks outside the Russian Federation before 
being transfer to residents accounts in authorized banks; 
- foreign exchange resulted from operation s with emissive securities (rights for 
securities).  
-  
The list of foreign exchanges subject to mandatory sale on domestic foreign exchange market of 
the Russian Federation, is set by the CBR.  WT/ACC/SPEC/RUS/29 
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The mandatory sale of foreign exchange procee ds on domestic foreign exchange market is 
carrying out at the exchange rate on the date of sale.   
Preferences and exceptions for ma ndatory sale of foreign exchan ge proceeds are set by federal 
laws.  In accordance with the draft Federal law resident s can freely open foreign exchange accounts 
with banks outside the Russian Federation in foreign states which are members of the OECD or of the FATF (Financial Actions Task Forces). In  such cases residents have to notify the 
monetary authorities about such operations (ope ning/closing of their accounts) within one 
month after signing/canceling of relative agreemen t with banks outside the Russian Federation. 
In all other cases residents can open accounts with  banks outside the Russian Federation in the 
order set by the CBR; this order can provide prior registration of such accounts (Article 14, p.3 of the draft). 
 
Transfers of funds by residents to their accounts with banks outside the Russian Federation are 
carrying out in the order, set by the CBR; this  order can provide requirement for regime of the 
accounts and reservation requirement for the amo unt not exceeding 100% of the volume of the 
operation for the period not longer than 60 ca lendar days before the date of operation. 
 
Provisions of the legislation in force
 
 Concerning the restrictions on currency tran sactions which were not approved by the 
International Monetary Fund the CBR has no offi cial evidence on approving or disapproving 
the existing restrictions on currency transactions. 
 
The capital transactions were subject to the reg ulative procedures of the CBR. Practically all 
currency operations on capital transactions conn ected with capital inflow are conducted freely 
and  the CBR permission is not required. From th is list the following operations are excluded: 
loans on debentures floated by residents on  international financial markets and credits 
borrowed by residents from nonresidents in forei gn currency without entering sums to current 
currency accounts of residents opened in Russian authorized banks. The majority of operations 
connected with capital outflow are conducted only upon the CBR’s permission. These are:  
- export payments by instalment and anticipatory import payments on time period 
exceeding 90 days; 
- loans in foreign currency allowe d by residents to nonresidents; 
- payments by residents into capital stock of nonresidents; 
- opening of accounts by judicial persons-residents in banks-nonresidents; 
- opening of accounts by private persons-residents in banks-nonresidents in OECD and 
FATF non-member countries; 
- operations of residents with nonresidents on secondary market on sale and acquisition 
in foreign currency of securities nominate d in foreign currency evading the Russian 
authorized banks; 
- foreign currency transfer for acquisition of real property by residents abroad.  
  These transactions could require permissions of th e CBR, or notifications to the CBR, or could 
be conducted freely. Permissions and notificati ons did not constitute unnecessary barriers to 
trade. The procedures were transparent and publicly available through normative acts 
published by the CBR. The number of capital op erations requiring the permissions by the CBR WT/ACC/SPEC/RUS/29 
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was constantly being reduced and superseded by  simple notification procedures or free 
execution.    The 1% tax on foreign currency acquisition was abolished from January 1, 2003. 
 
The requirement of mandatory sale of 50 % of currency revenue by resident legal entities on 
internal currency market is required by th e Russian legislation (until August 2001-75%), 
Article 6.5 of the Federal Law "On Curren cy Regulation and Currency Control". The 
mandatory sale is conducted by resident legal  entities from the lump sum received from 
nonresidents in foreign currency. For the list on  foreign currency revenue from non-residents 
subject to mandatory sale and comme nts see para 15 of the Document 
WT/ACC/SPEC/RUS/25/Rev.1.  The mandatory sale of a part of  currency revenue is not a restrict ion subject to Article III (The 
National Treatment on International Taxation an d Regulation) and XI (General Elimination of 
Quantitative Restrictions) of GATT 1994. 
 According to the CBR the sale of a part of currency revenue is not a measure leading to 
discrimination of non-residents and internal ma rket protection subject to Article III GATT, 
because it regulates the operations of all resident legal entities. This measure is not subject to 
quantitative restrictions of import as to Articl e XI of GATT 1994, because after sale of current 
revenue exporter has a possibility of acquiring of foreign currency on internal currency market, 
necessary for payment for import. See para 22  of the Document WT/ACC/SPEC/RUS/25/Rev.1. 
 Currently the possibility of reducing the norm of ma ndatory sale of a part of currency revenue 
by exporters is being considered. 
 
The Currency restrictions on current curren cy operations (Table 1 of the Document 
WT/ACC/SPEC/RUS/25/Rev.1) identified by th e IMF are still valid and the restrictions on 
conducting such operations are not so strict.  
According to the Russian legislation and the CBR legislation, there is no requirement for 
nonresidents to deliver goods during 90 days from  the date of  completed pre-payment by 
resident and do not impose a restriction to make contracts on longer terms. 
 According to the Russian currency legislation tran sfer of foreign currency by resident from the 
Russian Federation (entering a sum in foreig n currency to a non-resident’s account in 
authorized bank) in the form of pre-paymen t for the imported goods, services, works, 
intellectual property results on contracts not ex ceeding 90 days is subject to current currency 
operation conducted freely, without restrictions and does not require the CBR permission.  
If the period between the transfer of foreign cu rrency in pre-payment and the delivery of goods 
(execution of  works,  supply of services, transfer of the results of intellectual property) exceeds 90 days, such operations are qualified as operati ons connected with capital transfer and are 
conducted only after the  appropriate permission of the CBR is received.   If the contract on import requires a pre-payment on term not exceeding 90 days until the date 
of delivery, but upon the performance of a cont ract due to some reasons there appears a 
necessity to prolong the term on more than 90 days , it is quite possible. It is enough for the 
importer before the exceeding of 90 days period apply in CBR to obtain the permission.          WT/ACC/SPEC/RUS/29 
 Page 13 
 
 
 Paragraph 
No. Comment 
  
On legal status of the Central Bank of the Russian Federation (CBR)  
 The special legal status of the Central Bank of the Russian Federation is identified by the 
Article 75
 of the Constitution of the Russian Federation. It determines the exclusive right of 
CBR for money issue (part 1) and its main function as a protection and providing for stability of ruble (part 2). The status, activity’s purposes,  functions and authorities of the Central Bank 
of the Russian Federation are also identified by the Federal Law «On the Central Bank of the 
Russian Federation (the Bank of Russia)» and other Federal Laws.  
 Under the Article 3 of the Federal Law «On th e Central Bank of the Russian Federation (the 
Bank of Russia)» the purposes of the activities of the Bank of Russia are: protection and providing for stability of ruble; development and consolidation (strengthening) of banking 
system of the Russian Federation and providi ng for the effective and sustainable payment 
system’s functioning.  
 
The key feature of the legal status of the Central Bank of the Russian Federation is the principle of independence, which appears, first of  all, in the fact, that the Bank of Russia is a 
special public legal institute, which has the excl usive right for money issue and organization of 
monetary circulation. The functions and authorities, anticipated under the Constitution of the 
Russian Federation and the Federal Law «On th e Central Bank of the Russian Federation (the 
Bank of Russia)», are executed by the Bank of Ru ssia independently of federal executive bodies, 
government bodies of the subjects of the Russian Federation and local authorities. The independence of the Bank of Russia is reflected in the Article 75 of the Constitution of the Russian Federation and also in the Articles 1 a nd 2 of the Federal Law «On the Central Bank of 
the Russian Federation (the Bank of Russia)».  
 
The Bank of Russia is a juridical person. The authorized capital stock and other assets of the Bank of Russia are federal state property, and at  the same time the Bank of Russia is endowed 
with property and financial independence. The right to ownership, usage and disposition of property of the Bank of Russia, including gold and foreign exchange reserves of the Bank of 
Russia, are realized by the Bank of Russia itself  in accordance with purposes and the order, 
established by the Federal Law «On the Central Bank of the Russian Federation (the Bank of 
Russia)». The withdrawals or charging with commitments of the Bank of Russia’s property without its accord are not allowe d, unless this is provided specifically by the Federal Law. The 
Bank of Russia carries its costs at the expense of its own revenues. The Bank of Russia has the 
right to protect its interests judicially, including in ternational courts of justice, courts of foreign 
states and arbitration.  The State does not carry responsibility over commitments of the Bank of Russia, as well as the Bank of Russia does not meet commitments of the Stat e, if they have no specifically  taken such 
commitments or if other is not provided by the Federal Laws. The Bank of Russia does not 
carry any responsibility over  commitments of credit  institutions, and credit institutions do not 
meet commitments of the Bank of Russia, with the exception, when the Bank of Russia or credit 
institutions have taken such commitments.  The Bank of Russia reports to the State Duma  of the Federal Assembly of the Russian 
Federation, which appoints and relieves of his position the Bank of Russia’s Chairman (by the 
submission of the President of the Russian Federation) and members of Board of Directors of the Bank of Russia (by the submission of the Chairman of the Bank of Russia, agreed with the WT/ACC/SPEC/RUS/29 
Page 14  
 
 Paragraph 
No. Comment 
President of the Russian Federation); appoints  and relieves representatives of the State Duma 
in the National Banking Council of  the Bank of Russia within the limits of its quota, and also 
considers basic directions of the state monetary  policy and the annual report of the Bank of 
Russia and take decisions on them. 
 
Based on suggestions of the National Banking Council of  the Bank of Russia the State Duma 
has the right to take decision on auditing by  the Accounts Chamber of the Russian Federation 
of financial and economic activity of the Bank of Russia, its departments and institutions. 
Besides, the State Duma holds parliamentary hearings on the Bank of Russia’s activity with participation of its representatives, and also he ars reports of the Bank of Russia’s Chairman on 
the Bank of Russia’s activity at submission of annual reports and considers basic directions of 
the state monetary policy.  On Functions of the Bank of Russia
 
 
The Bank of Russia carries out its functions in a ccordance with the Constitution of the Russian 
Federation and the Federal Law «On the Centra l Bank of the Russian Federation (the Bank of 
Russia)» and other Federal Laws. In accordance wi th the Article 4 of the Federal Law «On the 
Central Bank of the Russian Federation (the Bank  of Russia)», the Bank of Russia performs the 
following functions: 
- in cooperation with the Government of  the Russian Federation works out and 
implements the state monetary policy; 
- has the sole right for the currency emissi on and organization of cash turnover; 
- comes up as the creditor of ultimate authority for the credit institutions, organizes the 
refinancing system; 
- sets up the standards of payments’ execution in the Russian Federation; 
- sets up the standards of banking operations; 
- executes the service of budget accounts at all levels of the Russian Federation’s budget 
system, if other is not provided by the Fede ral Laws, by carrying out settlements upon 
request of authorized state executive bodi es and state off-budget funds, which has the 
function to organize the execution of budgets; 
- manages the gold and foreign exchan ge reserves of the Bank of Russia; 
- takes decisions on the state registration of cred it institutions, draws licenses to the credit 
organizations for conduct of banking operati ons, suspends their proceeding and recalls 
them; 
- supervises the credit organizations’ and banking groups’ activity; 
- registers the issue of securities of the cred it organizations in accordance with the 
Federal Laws; 
- executes on it’s own or upon the request of the Government of the Russian Federation 
the banking operations and other deals, whic h are necessary for the execution of the 
Bank of Russia’s functions; 
- organizes and exercises currency regulation and currency control in accordance with 
the legislation of the Russian Federation; 
- sets up standards of execution of payments to and from international organizations, 
foreign states, and also with juridical and physical persons; 
- sets up accounting standards for the banking  system of the Russian Federation; 
- sets up and publishes official foreign currencies’ rates against ruble; 
- participates in elaboration of balance of p ayments’ forecast of the Russian Federation 
and compiles the balance of paymen ts’ of the Russian Federation; 
- sets up the order and terms of trading in foreign currencies by  foreign exchanges;  WT/ACC/SPEC/RUS/29 
 Page 15 
 
 
 Paragraph 
No. Comment 
draws, suspends and recalls licenses of foreign exchanges (the functions on drawing, 
suspending and recalling  licenses of the forei gn exchanges the Bank of Russia will start 
to execute with coming into effect of th e Federal Law on changes in the Federal Law 
«On licensing of certain kinds of activities»); 
- carries out the analysis and the forecast of the Russian Federation’s economy in whole 
and by regions, first of all, monetary , currency and price relations, publishes 
corresponding materials and statistical data; 
- executes other functions in acco rdance with the Federal Laws. 
  Basic instruments of monetary policy
 
 
The instruments of monetary policy, used by  the Bank of Russia, include mandatory reserve 
requirements, open-market operations and various other mechanisms, which enable commercial banks to manage their liquidity. In 2002 the application of monetary policy instruments proved the necessity to review the mo netary policy tool set, used by the Bank of 
Russia. At the end of 2002 it was amended by  implementing the operations REPO and reverse 
REPO and currency swaps.  At present the Bank of Russia uses the follo wing instruments of monetary policy: 
 
1. Mandatory reserve requirements 
are used by the Bank of Russia for the regulation of 
commercial banks’ liquidity. At the same ti me the role of this instrument decreases 
because of the growth of importance of market instruments. - The Bank of Russia reviews the standa rds of mandatory reserves quite rarely 
(the last review took place on 1
st January 2002). At present the standard of 
mandatory reserves for debt funds of ju ridical persons denominated in the 
currency of the Russian Federation and fo r debt funds of juridical and physical 
persons denominated in the foreign currency  is equal to 10 %, and the standard 
of mandatory reserves for funds of physi cal persons, attracted to deposits 
denominated in the currency of the Russian Federation is equal to 7 %. 
2. Open-market operations. 
- Open-market operations are an important market instrument, widely used by 
the Bank of Russia. These operations are carried out in order to reinforce and 
sterilize the liquidity. To strengthen the banking liquidity the Bank of Russia daily carries out operations with govern ment notes - operations REPO for the 
term of up to 7 days. 
- In case of necessity of excess reserves’ withdrawals the Bank of Russia carries 
out auctions of reverse REPO with government securities for the term of up to 1 month. 
- The Bank of Russia may also carry out operations REPO and reverse REPO for 
the terms of up to 3 months. 
- In case of long-standing overflow or lack  of banks’ liquidity the Bank of Russia 
carries out final sales or purchases of government securities. 
3. The Bank of Russia uses various mechanis ms, which enable commercial banks to 
manage their liquidity. The Bank of Russia reg ulates the interest rates by the following 
mechanisms. - Since 7 August 2002 the refinancing rate of the Bank of Russia was fixed at 
21%. At present it is not used though for granting of refinancing credits by the 
Bank of Russia, and has exclusively inform ational character as an indicator of 
the state of the money-market. WT/ACC/SPEC/RUS/29 
Page 16  
 
 Paragraph 
No. Comment 
- For the refinancing of commercial banks the Bank of Russia grants one-day 
credits, which rates are maximal for the rates of the money-market (the interest 
rate is 18 %). Besides, the Bank of Russia grants pawn credits to the commercial banks and also credits, secured by bills and chose in actions on credit contracts 
and by guarantees. The pawn credits are granted by auctions, for up to 7 days, 
and the credits, supported by the security of chose in actions and by guarantees 
- for up to 180 days. 
- The mandatory condition for obtaining credits from the Bank of Russia is the 
availability of security. The composition of pawn guarantee on credits «overnight» and pawn credits is determined by the Pawn list. 
- Since 26 September 2002 the Bank of Russia put into action the mechanism of 
refinancing of the credit organizations through transactions of the type «currency swap». This decision was directed at development of regulation of commercial banks’ short-term liquidity and the maintenance of stability of 
Russian money-market. 
- The «currency swap» operations are purch ases by the Bank of Russia of USDs 
for rubles on spot terms at the official ra te with the following sale of dollars for 
«tomorrow», at the rate equal to the basic rate, increased swap-margin, which 
corresponds to the rate on «overnight» credits (18 %). 
- For the purpose of sterilization of liquidity the Bank of Russia accepts deposits 
of commercial banks («overnight», 3 and 7 days, «till called for»). The interest 
rates on such deposits are the minima l on the money-market. In January 2003 
they varied from 1 to 3 % depending on the type of deposit or the term of its floatation. 
- The choice of the Bank of Russia of the tool set by the term (short-term, 
medium-term, long-term) or by type of in fluence (sterilization or strengthening 
of liquidity) depends on the current macroeconomic situation. At the beginning 
of 2003 the macroeconomic situation indicated the necessity of use of mixed strategy , i.e. use of instruments of steriliz ation of liquidity as well as its increase.
27-29 - Investment Regime 
27-29 Russia has not yet responded to our prev ious requests for additional information on 
different sectoral investment regimes (eg a ffecting the alcoholic drinks, aircraft and 
vehicles industries) and the reforms being considered in connection with Production 
Sharing Agreements (PSAs).  (See in partic ular our papers of 20 March and 15 May 
2002.) 
27-29 We expect information on the content of the legislation that is listed. Changes in 
investment policy have trade effects. A lthough there are separate chapters on both 
GATS and TRIMS, investment policy and legi slation in the light of these agreements 
and other WTO agreements  should be elaborated on. 
27-29 The report should include a concise description of the elements of Russia’s 
investment regime, including, at a minimum, the following:  legislative basis; institutional arrangements for the review of  investments, incentives offered, or 
current restrictions in place on investment (e.g., restricted sectors, equity limitations, 
etc.); other pertinent policies or laws (e.g ., laws on bankruptcy, la nd ownership, profit 
repatriation, bilateral investment treaties, etc.) and any proposals for new investment 
rules under consideration.   Please provide information the status of the revisions to the PSA law and actions taken to ensure that WTO-inconsistent  TRIMS are eliminated and not added. 
Russian Federation Response:   WT/ACC/SPEC/RUS/29 
 Page 17 
 
 
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No. Comment 
 
New investment-related legisl ation was adopted. Thus, the new Land Code of the Russian 
Federation (Federal Law of October 25, 2001, No. 136-FZ) entered into force. The Land Code provides that foreign nationals, stateless persons and foreign legal entities may be assigned land 
plots held in state or municipal ownership as follows: 
 - for ownership – for a mandatory fee in such  amount as provided by the Land Code 
(Articles 65, 66 of the Land Code of the Russian Federation) – except as provided by the Land Code and decisions of the President of the Russian Federation in his capacity as 
the decision-making authority on national security issues and Head of the Security 
Council of the Russian Federation; 
- for lease – except as provided by the Land Code (Articles 22, 27 of the Land Code); 
- for construction – except as provided by th e Land Code (Articles 27, 28 of the Land 
Code). 
 
For security considerations, foreign nationals, st ateless persons and foreign legal entities do not 
have the right to hold land plots by the right of ownership where such land plots are located: 
 - in borderline territories, the list of such terri tories being established by the President of 
the Russian Federation in accordance with fe deral laws on State Border of the Russian 
Federation; 
- in closed administrative areas and other t erritories of the Russian Federation specially 
appointed by federal laws. 
 Foreign nationals, persons without citizenship and foreign legal entities that own buildings, 
constructions and/or facilities located in a land plot owned by another person, have a 
preemptive right of purchase or lease in resp ect of such land plot, unless the Land Code or 
decisions of the President of the Russian Federa tion prohibit lease or purchase of such land 
plots. The President of the Russian Federation as the decision-making authority on national security issues and Head of the Security Council of the Russian Federation has the right to 
exempt certain types of buildings, constructions and facilities from the effect of this rule. 
 
In addition, commercial transactions in agr icultural land are governed by Federal Law No. 
101-FZ of July 24, 2002 «On Commercial Transactions in Agricultural Land». Foreign nationals, foreign legal entities, stateless perso ns and legal entities with authorised (share) 
capital more than 50% owned by foreign national s, foreign legal entities, stateless persons may 
hold agricultural land plots by the right of lease only. 
30-39 - State Ownership and Privatization 
30-39 State enterprises are an important issue (for both GATS and  GATT) but the 
discussions haven’t evolved much, the text h as been shortened rather than improved. 
The substantive issues have to be tackled in  other chapters and  in the negotiations on 
specific commitments, but as a transparency  exercise more information is needed. 
Information on the number of state-owned comp anies is of a lesser importance, while 
information on the impact of state-controlled companies on the overall Russian economy is of great importance to assess the proportion of the free market and assure 
its principles. It is  therefore necessary fo r further specification and quantification of 
such companies. It could be productive to make a clear distinction where/in what 
sectors does the government/state have owners hip interests and where it has majority 
control. And give information on which sectors the state’s ownership is in commercially driven enterprises versus wher e the enterprises (and the state as owner) WT/ACC/SPEC/RUS/29 
Page 18  
 
 Paragraph 
No. Comment 
have other objectives than commercial interests.  
- A clearer definition of Federal State Unitary Enterprises is necessary. 
30-39 Can the information in Tables 3, 4, and 7 of WT/ACC/SPEC/RUS/25 be restored?  
36 What is a "unitary enterprise" and how is it different from other "state-owned" or 
state trading enterprises? 
37 Please provide information, both in the text  and in the tables, on the percentage of 
trade and economic activity accounted for by the "State" sector if firms with 25 percent or more government ownership ar e included, as this can constitute an 
ownership share that determines company policies.  
Please indicate approximately how many of these firms in the state sector are 
engaged in international trade?  Do any trade on behalf of the Government, or and 
have any special benefits? About what percentage of domestic economic  activity and of international trade is 
accounted for by state-owned firms (25 pe rcent or more government ownership)?  
37 We would appreciate information on address st ate-owned firms that have not been, or 
are not intended to be, privatized (e.g., how many, what type) and an indication of 
why they are likely to remain in state hands. 
Russian Federation Response  
 
Pursuant to the Civil Code of the Russian Federation (Article 48), a legal entity is an organisation which has in its ownership, economic management or operational administration a specific property and honours its obligations with this property, may acquire and exercise property and personal non-property rights in its own name, bear responsibility, and be a 
plaintiff and defendant in court. 
 Legal entities may be organisations which have the making of profit as the primary purpose of 
their activities (commercial organisations) or tho se which do not have the making of profit as 
such a purpose, and which do not distribute profit received between the participants (non-
commercial organisations). 
 Legal entities which are commercial organisat ions may be created in the form of business 
partnerships and companies, production cooperati ves, state and municipal unitary enterprises. 
 Legal persons which are non-commercial organisatio ns may be created in the form of consumer 
cooperatives, social or religious organisations  (associations), owner-financed institutions, 
charitable and other foundations, as well as other forms specified by law. The existing legislation does not provide for the state enterprise as a form of legal entity.  Pursuant to Article 113 of the Civil Code of th e Russian Federation, a unitary enterprise is a 
commercial organisation which has not been gr anted the right of ownership of the property 
assigned to it by the owner. The property of a unitary enterprise is indivisible and may not be 
apportioned into contributions (portions, shares), including among the workers of the enterprise. Only state and municipal enterpri se may be organised in the form of unitary 
enterprises. 
 
The legal status of unitary enterprises is govern ed by Federal Law of November 14, 2002, No. 
161-FZ «On State and Municipal Enterprises».  A unitary enterprise is a commercial organisat ion which has not been granted the right of  WT/ACC/SPEC/RUS/29 
 Page 19 
 
 
 Paragraph 
No. Comment 
ownership of the property assigned to it by the owner. Only state and municipal enterprises 
may be organised in the form of unitary enterprises. The property of a unitary enterprise belongs by the right of ownership to the Russian  Federation, a Russian Federation region, or a 
municipal formation. 
 
The following types of unitary enterprises may be  created and exist in the Russian Federation: 
 - unitary enterprise based on the right of eco nomic management –federal state enterprise 
and regional state enterprise of th e Russian Federation (hereinafter the state enterprise ), 
municipal enterprise; 
- unitary enterprise based on the right of op erational administration – federal budget-
supported enterprise, regional budget-support ed enterprise of the Russian Federation, 
municipal budget-supported enterprise (hereinafter the budget-supported enterprise ). 
 The Russian Federation, a Russian Federation reg ion or a municipal formation may act as the 
founder of a unitary enterprise. 
 The decision to establish a federal state enterprise  is in the discretion of the Government of the 
Russian Federation or federal executive authorit ies based on the acts defining the competence 
of such authorities. 
 
The procedure for determining the actual property assigned to a unitary enterprise by the right 
of economic management or operational administ ration, and the procedure for approval of the 
Charter of a unitary enterprise and signing of co ntract with its managing director are provided 
by the Government of the Russian Federation, the empowered regional state authorities of the 
Russian Federation and local administrations. 
 
In the event of bankruptcy of a unitary enterprise though the fault of the owner of the property of the unitary enterprise or other persons, incl uding the managing director, authorised to issue 
binding instructions or otherwise capable of direct ing the actions of the unitary enterprise, such 
persons may bear subsidiary liability for the ob ligations of the enterprise where the property of 
the debtor is insufficient. 
 The principles of state property management and privatisation in the Russian Federation (hereinafter the Principles ) were approved by Resolution of the Government of the Russian 
Federation of September 9, 1999, No. 1024 (as ame nded by Resolution of the Government of the 
Russian Federation of November 29, 2000, No. 903). 
 The Principles set forth the main goals, tasks and positions of state policy of the Russian Federation concerning management of the public sector of the economy en compassing the total 
of economic relations associated with use of st ate property assigned to federal state unitary 
enterprises based on the right of economic management or operational administration 
(hereinafter unitary enterprises ), state agencies (hereinafter agencies ), State Budget of the 
Russian Federation and property rights of the Russian Federation arising out of its participation in commercial organisations (ex cept state property used for budgetary purposes 
in accordance with the legislation of the Russian Federation).  
According to the Principles, the use of unitary en terprise as the organisational and legal form of 
operations is justified in the following cases:  WT/ACC/SPEC/RUS/29 
Page 20  
 
 Paragraph 
No. Comment 
1. use of property prohibited for privatisatio n, necessary for ensure national security, the 
functioning of airborne and water transport, achievement of other strategic interests of the Russian Federation; 
2. pursuing an activity aimed at accommodati ng social tasks, including sale of certain 
goods and services at minimum prices; 
3. development and manufacture of certain typ es of products affecting national interests 
of the Russian Federation and ensuring national security; 
4. production of certain types of products withdrawn from negotiation or restricted for 
negotiation; 
5. pursuing an activity allowed by federa l laws to be performed by state unitary 
enterprises only; 
6. pursuing certain subsidised types of activi ty, running a loss-maker production facility; 
7. pursuing an activity aimed at organisation and implementation of procurement and 
commodity interventions for the purpose of food safety of the state; 
8. pursuing scientific and R&D activity in industries participating in provision of national 
security. 
 According to the Decision of the Government of the Russian Federation No.1 of 4 January 1999  
On the Forecast of Development of State Sect or of Economy of the Russian Federation the 
following organizations were related to economic subjects (entities) of the State sector of 
economy of the Russian Federation for th e purpose of forecasting: the State unitary 
enterprises; the State institutions; joint-stock  companies more than 50 per cent owned by the 
State (i.e. joint-stock companies with 25 per cen t owned by the State were not been amounting 
to the State sector of economy by the working annual forecast of social-economic development).  
 It is possible to assess the scope of economic activity of the State sector of economy of the 
Russian Federation by the number of enterprise s related to the State sector of economy, the 
share of production in all sectors of econom y, employment in the State sector of economy. 
 According to the data of Goskomstat of Russia, in 2001, the share of the State unitary enterprises in the total number of economic subjects (entities) of the State sector of economy of 
the Russian Federation comprised  26,4 per cent,  the share of joint-stock companies more than 
50 per cent owned by the State comprised  7,1 per cent. The total number of economic subjects 
(entities) of the State sector of economy of the Russian Federation accounted for over 85000 
organizations in 2001.  
Information of production by the State sect or of economy were provided in para 37 
WT/ACC/SPEC/RUS/25/Rev.1.  The share of the workers of organizations of the State sector of economy of the Russian 
Federation accounted for 23,6 per cent in the total number of workers in economy in 2001. 
 
The legal status of the state unitary and municipa l unitary enterprises were defined by the Civil 
Code of the Russian Federation and by the Fe deral Law of the Russian Federation No.161-FZ 
of 14 November 2002 On the State and Municipal Unitary Enterprises and by their implementing regulations.  
In addition to para 33 WT/ACC/SPEC/RUS/ 25/Rev.1 the representative of the Russian 
Federation stated that according to Article 192 of the Budget Code of the Russian Federation 
each year the Government of the Russian Fed eration submitted a draft Privatization Program  WT/ACC/SPEC/RUS/29 
 Page 21 
 
 
 Paragraph 
No. Comment 
together with a draft law On the Federal Budget to the State Duma.  
 The Privatization Program in 2003 was adopted by the Decision of the Government of the Russian Federation No. 1155-r of 20 August 2002. According to this Decision the lists of open 
joint-stock companies with fed eral State participation (628 joint-stock companies) and the list 
of federal State unitary enterprises (435 state uni tary enterprises), planned to be privatized in 
2003, adopted. 
40-52 - Pricing Policies 
Tables 4, 5, 6 Tables 4, 5 and 6 now have a new column on the principles for price setting. This is 
useful. 
40-52 Russia has still to respond adequately to th e points and concerns previously raised by 
us in relation to the state regulation of pric ing, both for domestic and foreign markets. 
 In relation to railway freight transportation costs (paragraphs 48/49), Russia should specify how/when it proposes to complete the elimination of the current 
discrimination against export cargoes.  Diffe rential rates continue to be charged for 
rail transportation of cargoes for export by land border crossings.  In paragraph 50, a reference should be incl uded to Members’ concerns that current 
energy prices to domestic industrial consumers could reflect rates that do not ensure 
“adequate remuneration” in the sense of Article 14(d) of the WTO Subsidies 
Agreement and would thus confer a benefit on the domestic industrial users.  This is 
also necessary in order to explain the refe rence to the issue in paragraph 51 and to 
ensure coherence with other sections of  the report, for example concerning STEs 
(paragraph 256).  
Material in this section will also have to be updated to reflect discussion in the 
plurilateral meetings on Energy and in li ght of Russia’s programme of regulatory 
reform in the sector (eg concerning the proposed introduction of “cost-recovery” and “cost-plus” pricing), aiming at the future introduction of market-based pricing.  
40-52 It could be useful to have clear inform ation on the objectives of  state regulation of 
prices, are there social reasons for minimum prices for alcohol and  maximum prices for heating etc, or  where is price regulation in place to stop abuse of monopoly 
situation. Information on the affects of pricing regulations on trade in goods and 
services needed.  Considering the plurilateral discussions unde r way pertaining to energy prices, we 
will have to look further at this issue before  we can take a decision on the text. (This 
includes the commitment text of para 52. ). The clarifications needed on the 
calculation of gas prices are among others:   1. Does the methodology take due account of costs?
 We note in the non-paper 
on Methodology of Calculating Regulated Prices in Gas Supply the use of  the word ”reasonable” related to prod uction costs and profit margins and the 
possibility for quite an amount of subjectivity in this respect. Quotation from 
IEAs Russia Survey ”Low prices and wide-spread non-payment, combined with very high taxes explain GAZprom’s reduced incentive to deliver gas to domestic markets or to invest in new gas supply for these markets.” However, in the discussion in October,  reference was made to Gazprom’s 
investment projections as unreasonably ambitious as an argument for cutting WT/ACC/SPEC/RUS/29 
Page 22  
 
 Paragraph 
No. Comment 
capital costs as a basis for price calculation. 
2. Given that the methodology itself should not give rise to indirect 
subsidization, is the methodology in  fact implemented in its entirety?  Or are 
there holes from which subsidization can arise? Given the issue of non-
payment and estimates that Gazprom h as acquired roughly 50 pct. interest 
and/or ownership in the Russian urea and ammonium nitrate industry, this should be a valid query. Even if no n-payment no longer is a problem, 
Gazprom’s direct ownership interest in  the fertilizer industry needs to be 
addressed.  
3. Given the differentiation of pricin g between consumer groups (e.g. the 
service rate differentiation), with hou sehold consumers paying the least, in 
what group would the fertilizer industry customers be part of (given that group 1 pays the most for its gas and group 3 the least)? This should be clarified (This could be an argument to the contrary that there is subsidization. However, the questi on on implementation remains to be 
answered.) 
41 The inconsistency in the text remains. If the state is involved in setting prices 
(”Contract prices for goods and services subject to state price regulation on the 
territory of the RF were fixed by enterprises independently, subject to market conditions....) prices are not only based on market conditions. 
42 Referring to the questions raised in the Pa ra 42 regarding the application of minimum 
prices on certain alcohol products we would like to thank Russia for the explanation given in Para 44 that price control on alc ohol is related only to the internal sale. 
Reading it together with Table 4 our unders tanding is that minimum price level on 
internal sales is also applied also on imported alcohol. Please explain if our 
understanding is a correct one and if so, how  and at which point is the minimum price 
applied on imported alcohol? 
43 Please include information in the text sta ting that, vis-à-vis both state and local 
natural monopolies: - Only those activities designated as a natural monopoly in a federal law may 
be regulated as such; 
- The only natural monopolies in Russia are those listed in Article 4 of the 
Federal Law No. 147-FZ and in para 43 of the WP Report, and  
- Russia has no plans to designate other spheres of activity as natural 
monopolies. 
Also,  please include information on whet her or not activities designated as natural 
monopolies are restricted to wholly Russian-own ed firms, i.e., a foreign invested firm 
can engage in "natural monopoly" activities if it meets the other conditions in Russian 
law, e.g., telecommunications and energy, among others. 
46 The reference to public utilities is confusi ng as the definition of public utilities seems 
to cover many of the services specifically  mentioned in the text (utilities such as 
electricity, and transportati on, environmental services). 
46 Please provide information on whether local price controls on electricity discussed in 
this paragraph apply to fi rms as well as to the populace. 
We also seek the type of information previously contained in para 45 from SPEC/RUS/25 regarding use of  "contract prices" for goods and services subject to 
regulation." 
48-49 Please update the information on the status of Russia’s plans for the elimination of 
discriminatory pricing for transportation on ra ilway freight, in particular the date for 
the second stage.  WT/ACC/SPEC/RUS/29 
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49 Further information on the work to implem ent unification of railway freight rates is 
needed. 
49 Referring to the explanation given in the Pa ra 49 regarding the unification for railway 
freight taxes we ask the Russian delegati on to indicate when would the second phase 
of the tariff unification be implemented? 
50 Para 50:  Please provide information on all entities which set prices of national gas.  
Tables 4 and 5 seem to indicate that prices of natural gas are set by two different entities and at two different levels depending on whether it is "sold to the population." 
What is the relation of this statement to pa ra 256, which states that the price of gas 
exports are "linked to the prevailing world mark et price."  Is this linkage formal or de 
facto, since the gas is being sold on the world market?  We continue to seek an appropriate commitment on energy pricing. 
52 We support paragraph 52, but reserve th e right to propose amendments following 
clarification of these issues in the ongoing plurilateral process. 
Russian Federation Response:  
 The main purpose of state regulation of prices in monopoly sectors is providing macroeconomic 
effectiveness and ensuring balance of consum ers and goods producers’ (services providers’) 
economic interests in sectors wh ere such monopoly exists. 
 The basic principle of the Methodology of Determining Tariffs for Supply and Marketing Services provided by Gas Distribution Organizations (adopted by the Resolution  of the Federal 
Energy Commission of the Russian Federation № 8/9 dated February 6 2002) is the 
economically justified expenses method - when setting tariffs, organizations engaging in 
regulated activities are guaranteed coverage of economically justified expenses and ensurance 
of sufficient profit. This Methodology is unique and applies to all the gas consumers in its entirety without exceptions, exemptions, discounts or preferences.  
The fertilizer industry consumers, in particular, are part of the group wi th the biggest amount 
of gas consumption – more than 100 000 m
3 per year as they buy gas for further processing. 
 At the regional government level, prices are re gulated for electrical energy provided by regional 
electrical power-plants to the regional market, i. e. to enterprises as well as to the populace. 
 
In accordance with the Federal Law № 41-FZ of April 14 1995 “On state regulation of tariffs on 
electric and thermal power in the Russian Federation:  
The  Government of the Russian Federation
: 
- Endorses basic rules for supplying and utilizing gas, rendering gas supply services, 
federal gasification programs, procedures en abling independent organizations’ access to 
gas transportation and gas distribution networks, 
- Sets out main principles for calculating pri ces on gas and tariffs on gas transportation 
via gas transportation and gas distribution networks, 
- Defines prices for gas producers that are not affiliated entities to Gazprom 1. 
  Executive authorities in the subjects of the Russian Federation
 exercise regulation of prices on: 
- Natural gas marketed to households and housing and construction cooperatives, 
- Fluid gas marketed to households for hou sehold purposes (except for gas to fuel motor 
vehicles). WT/ACC/SPEC/RUS/29 
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- Federal government authorities and sub-fe deral government authorities hold joint 
powers in: 
- development and implementation of the federal gasification programs; 
- granting licenses for activities associated with developing gas fields and gas supplies, in 
compliance with procedures laid do wn by the Russian Federal law; 
- control over effective gas utilization; 
- surveillance and control over gas supply and ut ilization to be executed on a fail-safe 
basis. 
 The export contract prices for gas are not subject  to state regulation in the Russian Federation. 
Enterprises take decisions as for export contra ct prices independently. Such prices are fixed de 
facto  according to supply and demand on the customer’s market. However, as the “world 
market price” for gas doesn’t exist, it seems to be more correct to speak about different 
regional markets.  
1 The Russian Federation Government and federal executive authorities execute regulation of prices on :  
natural gas, petroleum (associated) gas and stripped dry gas (except for gas marketed to gas producers that are not 
affiliated to the Open Join-Stock Company Gazprom, jo int-stock companies "Yakutga zprom", "Norilskgazprom", 
"Kamchatgazprom" and "Rosneft-Sakhalinmo rneftgaz", as well as sold to  households, hous ing and building 
cooperatives), petroleum (associated) gas marketed to gas-processing operators for further processing, fluid gas for 
household purposes (except for gas marketed to citizens).  
53-54 - Competition Policy 
53-54 Please include in this section all relevant   legislative citations,  member requests for 
further information, and  information given on the activities of the Anti-Monopoly 
Committee. 
55-65 FRAMEWORK FOR MAKING AND ENFORCING POLICIES 
Powers of executive, legislative and judicial branches of government; Government entities responsible for maki ng and implementing policies affecting 
foreign trade; 
Division of authority between central and sub-central governments 
55-65 Points previously made by us remain re levant.  For example, paragraph 62 does not 
yet provide a satisfactory response to the request of Members for a full description of administrative and judicial review procedures and of how Russia intends to ensure that measures are taken against non-uni form application or non-WTO-compliant 
measures (in any given situation where WT O-inconsistencies may arise, including 
where sub-federal or local measures or competences are involved). 
55-65 This chapter is a candidate for early c onclusion. The Russian answers given to our 
earlier  questions on the right of appeal seem sufficient. 
55-65 The information included in paras 45 and 49 of SPEC/RUS/25 assisted in the 
understanding of Russia’s legal structure and believe that this information should be 
included. 
60 Please provide an example of an international agreement that requires "a national act 
to be passed for its enforcement."  Is the WTO Agreement such an agreement? 
62 In para 62 the procedure for appeal as to customs and taxes is spelt out. It could be 
useful for the same for standards, sanitary issues and TRIPs, especially in  the areas 
where conflicts often arise. Alternatively th e procedure for appeal could be drawn up 
under each chapter. 
62 The description in para 62 appears to i ndicate that Russian federal authorities would 
not intervene to assist if any state or lo cal authorities or officials violated WTO 
provisions, i.e., that an action, (not a lo cal regulation), was inconsistent with WTO 
provisions and that the only recourse for an importer or citizen attempting to exercise  WT/ACC/SPEC/RUS/29 
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WTO rights and benefits would be an administrative or court action as described in 
this paragraph.  Please provide a dditional information on this point. 
65 Positive that the commitment para 65 incl udes references to all three agreements 
GATT, GATS and TRIPS. 
Russian Federation Response:  
 The following instances may be defined as protection of civil law rights in administrative proceedings applied as provided by law: 
 
- appeal of actions and acts of state authorities with the executive authority immediately 
superior to them; 
- state authorities having jurisdiction passing a decision based on the methods of 
protection of civil law rights provided by Article 12 of the Civil Code of the Russian 
Federation (including: declaration of act issued by a state agency or local 
administration as being invalid, recognition of right, restoration of the position existing 
prior to infringement of the right, and restraint on infringing actions) pursuant to the procedure provided by regulatory acts. 
 
Pursuant to Article 405 of the existing Customs Code of the Russian Federation, any person 
may appeal decisions (including regulatory acts), action or inaction of the customs authorities of the Russian Federation and their officers, if su ch person reasonably believes that their rights 
and lawful interests have been infringed, and wh ere such decisions, action or inaction affect 
such person directly and personally.  
The procedure for appeal of decisions, actions or inaction of the customs authorities of the 
Russian Federation and their officers incl udes primary appeal and secondary appeal. 
 A primary appeal against decisions, action or in action of customs authorities of the Russian 
Federation or their officers must be lodged with the superior customs authority of the Russian 
Federation or the superior officer. 
 A primary complaint against decisions, action or inaction of the State Customs Committee of the Russian Federation and its officers must be brought to this Committee. 
 
According to Article 409, a primary complain t may be processed within one month. The 
superior customs authority of the Russian Federation or the State Customs Committee of the Russian Federation may extend the period of consideration of a complaint for up to two 
months.  Pursuant to Article 416, secondary complaints against decisions, action or inaction of customs 
authorities of the Russian Federation and thei r officers made or maintained in the course of 
customs control, customs cleara nce, proceedings in cases of customs rules infringement and 
consideration of such cases (except appeal against determinations of customs authorities of the Russian Federation regarding such cases and imposition of administrative sanctions in 
simplified form) and other issues that do not a ffect economic policies of the Russian Federation, 
should be lodged with the district (city) people’s court of location of the customs authority or 
place of work of the officer of the customs authority whose decisions, action or inaction are being appealed.  A slightly different procedure for appeal against acts  of tax authorities and action or inaction of WT/ACC/SPEC/RUS/29 
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their officers is provided by the Tax Code of the Russian Federation. 
 Article 138 provides that acts of tax authorities, action or inaction of their officers may be 
appealed with the superior tax authority (superior officer) or appealed judicially. 
 
Lodging of complaint to the superior tax authority (superior officer) does not prejudice the right to simultaneously or subsequently  lodge a similar complaint to court. 
 Judicial appeal of acts (including regulatory acts) of tax authorities, action and inaction of their 
officers by organisations and individual entrepre neurs is performed by means of bringing a 
statement of claim to arbitration court in acco rdance with the laws of arbitration procedure. 
 Judicial appeal of acts (including regulatory acts) of tax authorities, action and inaction of their 
officers by individuals who are not individual ent repreneurs is performed by means of lodging a 
statement of claim to a court of general jurisd iction in accordance with the legislation on 
judicial appeal of illegitimate acti ons of state authorities and officers. 
 Pursuant to Article 140 of the Tax Code of the Russian Federation, a complaint from a taxpayer will be considered by the superior tax authority (superior officer) within one month 
from the date of its receipt. 
 
Decision of tax authority (officer) in respect of a complaint will be made within a month. The decision is communicated to the complainant in writing within three days from its acceptance. 
 The Appellate Chamber of Rospatent hears disputes arising out of use of objects protected by the Russian laws regulating intellectual property i ssues (Articles 13, 19.2, 28, 29, 34, 42, 42.1 of 
Law of the Russian Federation of Septemb er 23, 1992, No. 3520-1 «On Trademarks, Service 
Marks and Appellations of Origin of Goods»  (as amended by Federal Law No. 166-FZ of 
December 11, 2002), Articles 21, 29 of Patent Law of the Russian Federation No. 3517-1 of September 23, 1992).  
The Appellate Chamber performs the following functions: 
 1. Considers objections to refusals to issue pa tent for an invention, industrial design or 
certificate for utility model or to accept an application for trademark, service mark or 
appellation of origin based on the results of a formal examination. 
2. Considers objection to refusals to issue patent  for an invention, industrial design or to 
register a trademark, service mark, appellation of origin and/or to grant the right to use an appellation of origin, based on an on the merits examination of applications and examination of the designations applied for. 
3. Considers objections from individuals and legal entities against issuance of patents for 
inventions, industrial designs and certificates fo r utility models in violation of existing 
Russian copyright certificates for inventions and certificates for industrial designs, and 
against registration of trademarks, service mark s, appellations of origin, and issuance of 
certificate for the right to use appellations of origin. 
4. Based on the results of hearings of the ab ove objections held in accordance with the 
Rules of Hearing Objections by the Appellate Chamber, the Appellate Chamber passes 
a decision. 
5. Provides confidentiality of hearings of any objections by the Appellate Chamber. 6. Prepares publication of its results in the official press organs of Rospatent.  WT/ACC/SPEC/RUS/29 
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7. Performs registration of documents conf irming payment of fees required by law for 
lodging an application with the Appellate  Chamber and for an act thereof by the 
Chamber. 
 
Law of the Russian Federation No. 3520-1 of September 23, 1992 «On Trademarks, Service 
Marks and Appellations of Origin of Goods»  (as amended by Federal Law No. 166-FZ of 
December 11, 2002) provides for creation of Patent Dispute Chamber within the federal executive authority (Rospatent) for considerati on of applicable objections, complaints, 
applications and petitions. The same provision  is contained in the draft law «On Amendment 
and Supplementation of the Patent Law». The Pa tent Dispute Chamber will be created based 
on the Appellate Chamber of Rospatent. 
 Pursuant to Article 43.1 of the Law «On Trad emarks, Services Marks and Appellations of 
Origin of Goods), the decisions of the Pa tent Dispute Chamber and the procedure for 
consideration of disputes are determined by the federal executive authority for intellectual 
property (Rospatent). The procedure for lodging objections and applications to the Patent 
Dispute Chamber and the procedure for their co nsideration are determined by Rospatent. 
Decisions of the Patent Dispute Chamber are subject to approval by the Chief Officer of 
Rospatent, take effect from the date of their approval and may be appealed in court in accordance with the legislation of the Russian Federation. 
111-115 Application of Internal Taxes on Imports 
- Excise Taxes 
115 Does Russia still provide a credit for the excise tax on imports from the CIS for 
excise taxes paid in their home markets?   If so, please describe how it works, and 
indicate what level of credit is granted for each CIS trading partner.   Why is the 
credit granted?   What is the timetable for the elimination of this measure? 
Table 14 Concerning the information in Table 14:  
 Please list some specific types of alcoholic beverages covered by the various excise tax categories.  
Where would  "wine coolers" or malt alcoholic beverages such as "Zima" and 
"Citron" covered in Russia’s excise tax regime.  Please clarify the difference between "natural wines" and "wines"?  Why is the excise 
tax on "natural wines" so much lower?    
 
Are the "excise taxes" applied to exported natural gas the only excise taxes applied to 
exports?    Are excise taxes exempted for all other Russian exports? 
117-125 - Value Added Tax 
117-125 The issue of VAT and sea fish caught by Russian fishing boats (our questions and 
Russian answers) is now sufficiently covered in the report.  Do VAT exemptions also include goods, wo rk and services intended for oil and gas 
exploration and production? That is th e goods and services that are used under a 
Production Sharing Agreement. This informa tion also needs to be presented  to the 
Working Party.  As a follow-up to the last question, will the current system of exemption from the VAT for goods, work and services intended for oil and gas exploration and WT/ACC/SPEC/RUS/29 
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production continue? The fundamental idea that lies behind the PSA is that tax 
paying under the agreements is replaced  with production sharing. The long-term 
nature and the substantial investments  n eeded for this sector craves a stable and 
forseeable investment environment. Up-front costs are high and payouts are long in 
coming. A profit based regime is especially important in the energy sector. As the 
IEA’s Russia Energy Survey 2002 puts it: ” To bridge the gap while the Tax Code 
and investment laws are put in place and tested. the PSA could be used as a mechanism to attract investment.”  We requests the RF to enter a commitment  that Russia’s domestic taxes, including 
VAT and excise taxes,.... would be applied in  a non-discriminatory manner to imports 
regardless of country of origin  and to domestically produced goods in compliance 
with GATT Art I and III... See  para 125. 
117-125 & Table 15 We welcome progress made towards WTO conformity through the progressive 
elimination of discriminatory rates a nd application of value added tax. 
- We seek clarification as to whether, under paragraph 120, Russia is seeking 
exemption from complying with Article III:2 of GATT in relation to 
application of VAT on account of its intention to form either a Customs 
Union or Free Trade Agreement with Be larus.  If so, can Russia clarify how 
the bilateral Treaty “On the Creation of the Union State” and related documents ensure compliance with Ar ticle XXIV (8) in relation to the 
definition of a Customs Union or Free Trade Agreement. 
- We seek clarification in relation to para graph 123 that Russia does not in fact 
apply a “VAT exemption” on fishery products, and instead VAT was applied upon the first transaction and not at the point of import into the customs territory.  If this is correct, paragr aph 123 should be amended to remove 
reference to “VAT exemption”. 
- We seek details of the WTO justifica tion for the VAT exemption in relation 
to agricultural products (item 20 of Ta ble 15(a)) of some producers including 
in relation to GATT Article III:2, and how it is administered in practice. 
- How do Russian tax authorities check that producers meet eligibility criteria 
and ensure that other agricultural pr oducts not falling under the exemption 
are also not obtaining VAT exemption? 
- Table 15(a) makes no reference to the need for entities to be “in a critical 
situation with no actual money to either pay salaries of VAT when paying for the job of employed persons by agricultural products”.  If this is a central aspect of the eligibility criteria for this exemption, it should be added to Part 20 in Table 15(a).  How do Russian authorities assess a “critical situation”, 
and at provisions are in place to revi ew eligibility of producers already 
obtaining VAT exemptions? 
- We seek the inclusion of appropriate commitment language in relation to this 
section. 
119-120 -  We seek additional specific information on Russia’s plans for eliminating the 
preferential treatment afforded Belaru s on VAT application to imports, and a 
commitment to provide full MFN treatment.  
- Please confirm that in the period 2004-5 Russia will not require this special 
treatment from its CIS trading partners as it adopts the "destination principle" 
for VAT taxation of its oil and gas exports.  
Table 15 -  Please update the information in the table on VAT exemptions to reflect the 
additions or changes implemented in  January 2002.  Please supply the HS  WT/ACC/SPEC/RUS/29 
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codes that cover the lower-VAT items. 
- Please describe the content of Article 149 of the Tax Code and indicate how 
it relates to the provisions of the new Tax Code. 
124 Concerning the exemption of domestic agricultural output from the VAT, please 
provide additional information on whet her commercial sales of domestic raw 
agricultural produce within Russia are also subject to the VAT, as are sales through 
barter and for financial obligation reimbursements. 
209-225 Technical Regulations and Standards, Including Measures Taken at the Border 
with Respect to Imports 
- Technical Barriers to Trade 
209-225 The current regime as described in th e most recent version of the Working Party 
report is not compatible with the TBT Agreement.  The Russian Federation has 
acknowledged this situation and Russia has ta ken legislative initiatives to correct the 
situation, particularly through the recentl y enacted “Federal Law on the Basics of 
Technical Regulation in the Russian Federati on”.  We invite Russia to provide a copy 
of this new law, together with a full d escription of how it will be implemented and 
how existing barriers and problems in individual sectors (eg cosmetics, automobiles, pharmaceuticals, textiles) will be eliminated  and resolved. The Working Party report 
will subsequently need to be updated accordingly. 
209-225 We are aware that the new umbrella la w has been passed and that we will receive 
new drafting. Below we give indication of questions and issues that we hope will be 
answered by the new drafting. 
- It would be helpful if the chapter  in the next revision was better 
structured/ordered based on the issu es and commitments required: legal 
framework, enquiry point,  products under mandatory standards, voluntary standards, who is responsible for maki ng, implementing and deciding appeals 
(does it vary depending on the product), use of international standards, code 
of good practice, conformity assessmen t, foreign conformity assessment 
bodies. 
- Together with the main issue of standa rds, we also use the chapter as a source 
of information concerning market access for service providers in the field of testing, analysis and certification. Para 213 gives information that both foreign and domestic certification bodies  and laboratories are used. We seek 
primarily in the services negotiations market access commitments in this 
area, but we note that China has made a commitment in this area in their 
working party report. 
- para 220: The statement ”Subjects of the RF had no standards of their own.” 
leads to the issue of implementation: Transparency and predictability, on all 
levels of trade policy and on all leve ls of government is of the utmost 
importance both to domestic and foreign enterprises. OECD documentation refers to the implementation of  the Presidential and Government decrees on 
standards. The Gosstandard representatives in the federal districts are 
directed to assist the Presidentia l Representative on matters related to 
standards and certification and to provid e information to Gosstandart on the 
inconsistency of laws and administrative actions by regional governments in 
the district with federal laws and regulations of Gosstandart.  We wish to 
know whether these representatives also  work with the districts on the 
positive task of information dessimation and  the development of nationwide standards,a task we urge them to do. 
- para 222: we note that the 7 year trans ition period is taken up here. This will WT/ACC/SPEC/RUS/29 
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have to be reverted to. 
209-225 This section of the draft Report includes a long description provided by Russia.  
However the section needs more work whic h can only be undertaken after a full 
discussion of the issues with Russia in pl urilateral processes that need to be re-
engaged and whose work needs to be pushed to completion as matter of high priority.  Members will need to be convinced th at the legislative and administrative 
arrangements will fulfil the requirements of the TBT Agreement. 
This section of the draft Report does not a ppear to mention obligations under Article 
4 of the TBT Agreement or acceptance of the Code of Good Practice at Annex 3 of 
that Agreement. - We seek appropriate action, the inclusion of relevant information in the draft 
Report and commitments by Russia rega rding adherence of standards setting 
bodies to Annex 3 of the TBT Agreem ent and compliance of sub-federal 
bodies with the provisions of the TBT Agreement. 
209-225 We look forward to receiving a factua l description of the actual provisions of the 
Umbrella law on standards and information on what kinds of implementing regulations will be developed.  For exam ple, will these include procedural rules on 
the development of technical regulations and standards, transparency provisions 
(circulation of proposals for comment), fees and other similar measures?   In 
particular, we will be looking for information on: 
- Progress in drafting the necessary measures and an opportunity to review and 
comment on such measures; and   
- The status of Russia’s updated TBT/SPS Action Plan ("Inter-ministerial 
Program of Measures to Ensure Comp liance with the WTO TBT Agreement 
and SPS Agreement"), as referenced in SPEC/RUS/20/Rev.1 and a copy of 
the Plan and any other elaboration of a time table for transforming "all state standards to non-binding instruments."  
In addition, the new, shorter, list of pro ducts subject to mandatory certification should 
be included as an annex in the draft WP report. 
209 Does Gosstandart of Russia include both regulatory and commercial tasks? 
If yes, are there any plans for separating the two functions? 
212 & 217 The list of products subject to mandatory  certification is still very long.  We invite 
Russia to respond to the following questions: Can Russia justify the product list on 
the basis of the legitimate objectives in pa ragraph 2.2 of the TBT Agreement?  Can 
Russia ensure National Treatment with regard to certification fees and times?  Has Russia considered less burdensome conf ormity assessment methods, such as 
suppliers’ declaration of conformity, as sufficient and WTO compatible way of 
guaranteeing compliance with the relevant  technical regulations?  Can Russia 
stipulate exactly which other governme nt bodies, apart from Gosstandart, can 
legislate? For which products does this apply? 
212 -  Is Gosstandart of Russia accredited for its certification tasks, and by whom? 
- What are the “international practices” mentioned in connection with 
mandatory certification of products? 
213 Which are the foreign certification authorities and test laboratories? 
Who accredited them? 
214 Suppliers’ Declaration of Conformity (SDo C) appears to be possible for a limited 
number of products and can only be done by a Russian judicial person; manufacturer, 
seller or the performer but not by foreigne rs or their representative offices.  What 
steps has Russia taken to ensure that the principle of national treatment is respected 
with regard to SDoC?   WT/ACC/SPEC/RUS/29 
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214 Are the “interstate agreements” the same as mutual recognition agreements? 
216 There is a reference to two federal laws th at the Government intended to approve in 
2002, one on Accreditation and the other on Cataloguing.  Have these laws been 
approved as planned? If yes we invite Russia to provide the WP with copies as well 
as an explanation of their content and ma nner of implementation. Concerning the 
federal law on Cataloguing, what exactly does this term refer to? 
216 What will the federal law “On Cataloguing” be about? 
Will the drafts of the two federal la ws mentioned be notified to  WTO? 
217 Concerning mandatory certification: the draft report indicates that “while the draft 
framework law was not yet operational, Gosstandart was working on the exclusion of 
certain types of products from the range of goods subject to mandatory certification, 
and on the reclassification of certain types of products so as to allow their conformity confirmation by a declaration of conformity (quality system certificate, tests protocol 
of the accredited laboratory)”.  Has this exclusion and/or reclassification of products subject to mandatory certification been concluded? Were the companies informed of 
this? 
217 -  Is there a specific reason why only 35 % of domestic standards are 
harmonized with international standards? 
- Is the capacity for translation of in ternational standards into Russian 
sufficient?  
- Are there sufficient means provided for translation? 
218 The draft report gives some information on the new procedure of notification, stating 
that Russia intends that this should ‘provide  an adequate level of transparency on any 
measures taken’.   Initiatives to publish re gular newsletters and to make use of the 
Internet are also described.  We remain c oncerned, however that the Russian system 
continues to lack transp arency and predictability.  (As an example, European industry 
has continued to complain at the intr oduction of new and burdensome certification 
procedures in some sectors without c onsultation of stakeholders and without a 
reasonable time before the entering in force of  the regulations, which is expected to 
cause important disruption in trade - examples include cosmetics in 2001, 
pharmaceuticals in 2002).   We invite Russia to respond further on how it proposes to 
ensure adequate transp arency in the TBT area.   
218 What is the status of the web-page – has it been supplemented with documents and 
information in English? 
222 With regard to transitional periods (7  years) for the conversion of mandatory 
requirements into mandatory technical regul ations and the introduction of voluntary 
standards, as indicated in the draft law on “Fundamentals of Technical regulation in the Russian Federation”, covering both TBT and SPS measures, how does Russia 
propose to ensure that the law will be in  conformity with WTO obligations upon 
accession?  How will Russia deal, during this period, with the co-existence of the two 
systems (mandatory standards and deve lopment of technical regulations)? 
 We are also concerned by the statement that  international standards will not be used 
as the basis for technical regulations in cases where ‘technical and technological 
differences’ exist.  Russia should explain this  further.  How does it intend to ensure 
that any abuse of TBT provisions is avoided?  
222 Is the EU “New Method” used as a m odel for the current making of technical 
regulations in Russia? 
224 The marking of products remains unclear also in the new draft law. It presents 
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marks. Different marking systems, alt hough some of them are voluntary, might 
confuse the consumers, as well as addi ng to the regulatory burden imposed on 
business.  Has Russia considered a single c onformity mark for all mandatory marking 
schemes? (Note: a single mark should cove r all mandatory marking schemes and not 
imply combining voluntary and mandatory marking into a single scheme.) 
224 Are there any Russian marking schemes (c ompulsory/voluntary) that might constitute 
technical barriers to trade? 
221 Russia needs to respond in meaningful way to the specific concerns raised by 
Members. 
- We seek the inclusion in this section of the draft Report of more complete 
responses the concerns raised by Members. 
222 We seek clarification as to how the “volunt ary application of state standards would 
lead to an assumption of conformity to t echnical regulations”.  Furthermore, during 
the “seven year transitional period” envisaged  in the draft law, it is unclear whether 
Russia will be able to meet relevant pr ovisions of the TBT Agreement and which 
aspects it will not be able to comply with. 
- We seek the inclusion in this section of the draft Report more complete 
responses to these concerns. 
Russian Federation Response:  
 The State Committee of the Russian Federation for Standardization and Metrology (Gosstandart of Russia) was the federal au thority for standardization, metrology and 
certification matters. Gosstandart of Russia acte d directly or through its subordinate centres 
for standardization, metrology and certification and state inspectors, performing surveillance 
functions in respect of State standards and providing uniformity in the units of measure.  the Russian Federation. The Federal Law “On Techni cal Regulation” No. 184-FZ signed by the 
President of the Russian Federation on 27 December 2002 (it will enter into force from 1.07.2003), provides the new legal framework for technical regulations, standards and 
conformity assessment systems. Th e existing  Law of the Russian Federation No. 5154-1 of 10 
June 1993 "On Standardization" (as amende d and supplemented on 27 December 1995); and 
Law of the Russian Federation No. 5151-1 of 10 June 1993 "On Certification of Products and 
Services" (as amended and supplemented on 27 December 1995, 2 March, and 31 July 1998) 
would be null and void six months after official publication of the said Federal Law.  The new 
Federal Law also foresees the implementation of th e rules of the Code of Good Practice(of the 
TBT Agreement) in standardisation. Standards of  the Russian Federation Regions and industry 
(sectoral) standards are not addressed in the sa id Law. Therefore, once the Law entered all 
existing sectoral standards would be transforme d into national standards or standards of 
organizations during the transition period (7 yea rs) provided by the Law. However, during this 
transitional period requirements as regards pr oduction, production processes, exploitation, 
storage, transportation, sale and utilization estab lished by the normative acts of the Russian 
Federation and government agencies are subjec t to obligatory implementation only to the 
extent to meet the following goals:  - protection of life or health of people, property of physical or legal persons, state or 
municipal property, 
- protection of environment, life or health of animals and plants 
- prophylactics of activities which may violate interests of consumers (art. 46.1 of the 
Law) 
 
Pursuant to the above new legal framework, produc ts imported into the territory of the Russian  WT/ACC/SPEC/RUS/29 
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Federation were supposed to meet technica l, pharmacological, sanitary, veterinary, 
phytosanitary and ecological standards and requirements determined by the Russian 
Federation.  In particular, imports of products in to the territory of the Russian Federation were 
restricted if the products in question did no t meet the legislative requirements; were not 
accompanied by a certificate, did not bear the required marking in the instances envisaged by 
federal laws and other legal acts of the Russian  Federation; or were banned for use as harmful 
consumer goods. The Russian authorities establis hed the nomenclature of products and services 
that are subject to mandatory certification in the Russian Federation.  Products subject to 
mandatory certification were listed in Governme nt Resolution No. 1013 of 13 August 1997 (as 
amended on 24 May 2000) "On the Approval of  the List of Goods Subject to Mandatory 
Certification and the List of Works and Serv ices Subject to Mandatory Certification" (as 
amended on 24 May 2000).  Gosstandart was in charge of organizing and implementing mandatory certification. In instances envisaged by  legislative acts of the Russian Federation 
with respect to certain types of products, this task would be entrusted to other governmental bodies of the Russian Federation. The forms of  mandatory certification of products were 
determined by Gosstandart or other authorized  governmental bodies of the Russian Federation 
with due regard to established international pr actices. Mandatory certification is performed by 
the State Committee for Standardization and Metrology and other governmental administrative bodies of the Russian Federation authorized to perform the works involved in mandatory certification, certification authoriti es, testing laboratories (centres) and producers 
(suppliers, contractors). The Russian Federati on applies the requirements of technical 
regulations, standards and conformity confir mation procedures equally to Russian and 
imported products.  The list of goods for which safety might be co nfirmed by declaration of conformity was 
provided in Government Resolution No. 766 of 7 July 1999 "On Approval of the List of 
Products Whose Conformity May Be Confirmed by  Conformity Declaration". The list of goods 
subject to mandatory certification was reduced  by another 30% by Resolution of the 
Government of the Russian Federation No. 28 7 of 29 April 2002. The form of mandatory 
conformity confirmation had to be prescribed by  a technical regulation based on how great was 
the risk of failing to achieve the purpose of  such technical regulation. Documentary 
confirmation conformity of products subject to  mandatory conformity confirmation was in the 
form of a conformity certificate issued by certification authorities, or a declaration of conformity registered with the certification authority.  Such a certificate had to be submitted to customs authorities together with the cargo cust oms declaration, and was necessary to obtain 
permission for importing the products in questio n into the Russian Federation.  Recognition of 
certificates issued by the supplying countries wa s granted based on interstate agreements and 
international certification systems to which the Russian Federation had acceded.  The fees for 
certification of products and services, including ce rtification tests, were payable as provided for 
under the certification rules "Payment for Works Involved in Certification of Products and Services" approved by Gosstandart of Russia upo n agreement with the Ministry of Finance and 
registered with the Ministry of Justice of the Russian Federation. Work on mandatory 
certification of goods in the GOST R certific ation system was conducted by duly accredited 
foreign certification authorities and test laborato ries, as well as by Russian authorities and 
laboratories.  Certification authorities and test  laboratories were accredit ed in accordance with 
ISO/IEC Guideline 5 and ISO/IEC Standard 170 25, the procedure being uniformly applicable 
to Russian and to foreign certification authorit ies and laboratories.  The list of accredited 
certification authorities and test laboratori es was posted on Gosstandart's webpage, at 
www.gost.ru . 
 WT/ACC/SPEC/RUS/29 
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The Appeal Commission was formed at Gosstandart  for the purpose of considering complaints 
from users concerning actions of certification authorities, testing laboratories (centres), 
certification experts and applicants relating to certification, monitoring, use of conformity 
mark, issuance, suspension and cancellation of certificates, licenses, and other related issues. 
This Appeal Commission was regulated by its charter. All work related to bringing the 
legislation and practice into conformity with the WTO Agreements on TBT and SPS was 
conducted under the provisions of the Inter- Agency Program of Measures to Ensure 
Compliance with the Requirements of the WTO Agreement on TBT and the WTO Agreement 
on SPS . The Federal Law “On Technical Regulation” provided the following main approaches 
based on the provisions of the WTO Agreement on TBT: (i) issues of safety and quality of 
products would be regulated by legal acts, i.e. technical regulations providing binding 
specifications with respect to goods and their pr oduction processes which would take the form 
of a law, a Government resolution, or, in excep tional cases, a Presidential decree, and be based 
on the applicable international standards as required by paragraph 2.4 of the TBT Agreement; 
(ii) national standards would have the status of voluntary standards and be developed, as a 
general rule, based on the corresponding in ternational counterpart;  (iii) conformity 
confirmation procedures would be reconciled with  international rules and would be included in 
a technical regulation providing the producer with a choice of different confirmation schemes 
depending on the degree of potential danger of th e products;  (iv) legislative support would be 
obtained through a single enquiry point open to  customers, including international customers, 
and containing all available documents and documents in progress; (v) the Federal Law 
provided the main principles of assessment of the cost of conformity assessment system. The 
method for calculating the cost of mandatory conformity assessment was determined by the 
Government of the Russian Federation and was based on uniform fees rules for identical or 
similar products irrespective of the country and/ or place of origin or the identity of the 
applicant. The Federal Law provides a mechanis m for development and adoption of technical 
regulations including notification procedures . The Russian Federation maintains product 
certification schemes (1 – 8) used in int ernational practice and classified by ISO . 
 In view of the adoption of this Federal Law it is intended to examine the related legislation to 
define whether any amendments are necessary. Si multaneously, draft state standards would be 
developed based on a direct application of corre sponding international standards.  Voluntary 
application of such state standards should ensu re compliance with the requirements of technical 
regulations.  As technical regulations for vario us types of products were being developed and 
taking effect, all state standards (both existing and newly developed) would be transformed into 
non-binding instruments by revision, cancellation or adoption of new standards. The basic 
international standards for harmonisation pur poses were ISO, IEC MSE, EEC UN, the Codex 
Alimentarius, European norms and the intern ationally accepted ASTM and BAE standards. 
The Federal Law “On Technical Regulation” states in Article 16.9 that it is the responsibility of the national standardisation authority to approve  and publish in its official press organ a list of 
national standards achieving fulfilment of the corresponding technical regulations, so that 
voluntary application of state standards leads to  a presumption of conformity to technical 
regulations. The Federal Law provides also a 7-year transition period during which all 
mandatory requirements of state standards must be carried over into technical regulations and 
the standards themselves be given the status of voluntary documents. The philosophy of using international standards as the basis for developm ent of national standards (Article 12) equally 
applies to all types of products, except where it  is impossible due to special climatic and 
geographical conditions or technical and technological incompatibility.  
 For the purposes of implementing the provisi ons of the WTO Agreement on TBT, which  WT/ACC/SPEC/RUS/29 
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required harmonization of national standards wi th their international counterparts, since 1997 
and subject to state standardization plans, his authorities had developed and implemented state 
standards, over 50 percent of which were alrea dy harmonized with their international 
counterparts. The overall level of harmonization of domestic standards with international 
standards was currently about 35 per cent. 
 Although the Federal Law was due to take eff ect six months after its official publication, 
Gosstandart of Russia was working on the exclusio n of certain types of products from the range 
of goods subject to mandatory certification, and on reclassification of certain types of products 
so as to allow their conformity confirmation by a declaration of conformity on condition of the 
third party’s ability to produce certain additional  documents (quality syst em certificate, tests 
protocol of the accredited laboratory). The Single Enquiry Point contemplated by the WTO 
Agreements on TBT and SPS had been established to  inform the Russian and foreign customers 
of Russian legal provisions, standards, rules and conformity confirmation procedures. The 
enquiry point was located within  Gosstandart of the Russian Federation at the following 
address: 
   Russian Federation  4, Granatniy Pereulok,  
 103001, Moscow 
 e-mail : ENPOINT@VNIIKI.RU  website – http://www.ricwto.ru
 
 Tel/Fax: (007 095) 230 25 98  In order to implement the requirements of the WTO Agreements on TBT and SPS with respect 
to the notification of draft regulatory documents, GOST R 1.13-2001 "State Standardization 
System of the Russian Federation - The Proced ure for Preparation of Notifications of Draft 
Regulatory Documents" had been enacted a nd published in November 2001.  This regulation 
provided the framework requirements and procedures for filling in the notification forms with 
respect to draft regulatory documents produced  pursuant to WTO Agreements on TBT and 
SPS. This standard allowed full-scale implementati on of procedures of notification of draft 
domestic regulatory document s to begin. Since 2000 Gosstandart had published a regular 
(quarterly) "Newsletter (Vestnik) of the Russian Enquiry Point", which contained such regulatory documents and reference materials as required by the WTO Agreements on TBT 
and SPS.  Draft documents were also published in the Newsletter. The Newsletter was also 
appointed for future publication of notification s of draft internal circulation documents. 
 In order to provide an adequate level of tran sparency on any measures taken, a website was 
created by the Ministry of Economic Develo pment and Trade and Gosstandart of Russia 
containing plans for development of standards,  draft laws, other draft regulatory acts, and 
other policy statements pursuant to WTO Agreement on TBT. During 2003, this page would be 
supplemented with documents and information in English. 
226-245 - Sanitary and Phytosanitary Measures 
226-245 We await new drafting and technical discussions on this very important issue. 
226-245 Under this section we feel that concer ns raised by several members of the Working 
Party are of essential importance, as SPS measures have a direct influence on the 
commitments on market access. We expect Russia to clarify how it is intended to 
implement equivalence provisions of Article 4 of the SPS Agreement. WT/ACC/SPEC/RUS/29 
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226-245 We look forward to receiving factual info rmation on the Umbrella law as it pertains 
to SPS measures and information on what ki nds of implementing regulations will be 
developed to bring its SPS regime into  conformity with the SPS Agreement. 
- In addition to a description of measures that are being taken currently, this 
section of the draft Working Party report would benefit from additional 
information on the process and time frame that Russia will use to bring its current SPS regime into conformity with WTO provisions.  
226-245 We welcome that this section of the dr aft Report does not include a request by Russia 
for a transition period for the implementati on of Russia’s future WTO obligations in 
relation to SPS measures. This new draft still falls short of the inform ation required to assess the consistency of 
Russia’s SPS regime with the SPS Agreement and other relevant GATT disciplines.  
This section of the draft Report will need to  be reconsidered when more progress is 
made in the plurilateral discussions on Russia’s SPS regime.  We support the concerns of members raised in paragraph 244 and:   
- We request that Russia press forward w ith a range reforms in this area to 
achieve full WTO conformity by the date of accession. 
- We seek the inclusion in this section of the draft Report of clear 
commitments on Russia’s part to impl ement the requirements of the SPS 
Agreement, including relevant legisla tive and administrative arrangements.  
Members will need to be convinced th at the legislative and administrative 
arrangements will fulfil the requirements of the SPS Agreement. 
- We seek appropriate action, the inclusi on of relevant information in this 
section of the draft Report and commit ments by Russia regarding adherence 
to Annexes B and C of the SPS Agreem ent and compliance of sub-federal 
bodies with the provisions of the SPS Agreement. 
We would appreciate advice as to when Russia’s SPS enquiry point will be fully 
operational, when it will provide access to all relevant regulations in a timely manner, 
and what steps Russia is taking to improve its  coverage so that traders can be fully 
aware of changes to SPS measures in advan ce of implementation of such changes. 
227-236 There is much information contained in th is section of the draft Report, but we find it 
confusing and it does not spell out clearly the various layers of Russia’s SPS regime, 
how it varies in its application according to type of good, and how the system 
conforms with all relevant aspects of the SPS Agreement.  We would find it helpful if 
further drafting efforts could concentrat e on detailing in a systematic and clear 
manner (possibly through the use of tables) the various layers of 
certification/registration and their specific purpose. In particular, there are references to a number of various approvals/forms of 
registration applying to imported goods, including: (i) sanitary-epidemiological 
approval (paragraph 227); (ii) registration certificate (paragraph 227); (iii) hygienic 
assessment (paragraph 227); (iv) sanitary a nd epidemiological conclusion (paragraph 
228); (v)  veterinary certificate (paragraph 228); (vi)  state registration for “certain types of products” (paragraph 229); approval of the MOA (paragraph 230). - We seek clarification as to whether th ese approvals constitute separate stages 
of forms of approval (or whether Russia  has simply used different terms to 
apply to a single registration procedure).  
- We also seek full details of administrative process and procedures, as well as 
costs involved in fulfilling the various registration/certification requirements so as to determine Russia’s adheren ce to Annex C of the SPS Agreement? 
- We suggest that it would be helpful if  Russia could provide a table setting out  WT/ACC/SPEC/RUS/29 
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for each product category (i.e. animal origin, non-animal origin, “new” 
goods, goods already on the Russian market) the various layers of registration/certification requirements in existence and the agency (or agencies) responsible for their implem entation.  We also ask Russia to 
provide a WTO justification for multiple certification requirements. 
234 It is stated that the MOA (Veterinar y Department) is the responsible Federal 
executive authority in charge of veterinary control over imports of animal products.  
We understand that the Veterinary Departme nt is effectively an autonomous body 
within the Russian system of Government.  In light of the requirements of Article 13 (Implementation) of the SPS Agreement, wh ich, inter alia state that Members are 
“fully responsible for the observance of all obligations set forth herein”, we seek an 
explanation of the formal legal status of th e Veterinary Department , its relationship to 
the Ministry of Agriculture, and how Russia will ensure it can meet the obligations of 
Article 13 of the SPS Agreement. 
235 In it is stated that “import of cargoes controlled by the State Veterinary Service 
required authorisation of the Chief State Veterinary Inspector of the Russian Federation, with regard to the epizootic situation in the exporting country “and taking 
into account the Russian firm’s ability to ensure appropriate conditions of care for 
imported animals, and storage, processi ng and sale of animal products”.    
- We seek clarification as to the conditi ons under which, and in relation to 
what circumstances and products, import of cargoes require written authorisation.  Is this authorisation an  additional requirement to sanitary tests 
and veterinary certificates of the exporting country? 
- What are “controlled cargoes” and what is  the scientific basis for both their 
determination, and for they being subj ected to different import requirements 
to other products? 
- Are Russian buyers/retailers/wholesalers of similar domestically-produced 
goods subject to the same tests in relation to their ability to ensure 
“appropriate conditions”? 
236 It is stated that in the absence of approved veterinary certificates, animal products 
were exported to Russia under “general veterinary certificates”. 
- We seek clarification on the nature of “general veterinary certificates” and 
whether they are provided by expo rting countries or by the Russian 
Veterinary Service. 
237 We request that responses to the following qu estions be included in this section of the 
draft Report: - What is the necessity for Russian supe rvision of preshipment inspection of 
raw meat products not having undergone thermal treatment? 
- What steps will Russia take to explore whether policy objectives 
underpinning this requireme nt could be met by rec ognition of the equivalence 
(Article 4 of the SPS Agreement) of  export-country inspection methods?  
It is also stated that bilateral agreem ents on the presence of Russian veterinary 
inspectors to supervise the fulfilment of  Russian Veterinary Service requirements 
when delivering meat to the Russian Federa tion had been reached with a number of 
countries with “unfavourable epizootic situa tions” with regard to infectious animal 
diseases. - We seek clarification as to the de finition of “unfavourable epizootic 
situations” and the WTO justificati on for Russian veterinary inspectors 
supervising requirements for delivering meat to Russia. 
- What steps does Russia take to test that the measures of the exporting country WT/ACC/SPEC/RUS/29 
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achieve Russia’s level of sanitary an d phytosanitary protection, as provided 
for in Article 4 of the SPS Agreement? 
239 At paragraph 239, it is stated that transit cargoes of live animals "require written 
authorisation by the Chief Veterinary Insp ector of the Russian Federation or his/her 
deputies". - We request that details of this requireme nt be included in this section of the 
draft Report, including the process involved; the criteria upon which a 
decision is made; and how this meets the requirements of Article V of GATT 1994? 
240 This paragraph seems to contradict the advice provided in Paragraph 239 that transit 
of cargoes does not require written authorisation by the Chief State Veterinary Inspector.  Can Russia please clarify? 
Russian Federation Response:  
 The Department on State Sanitary-and-epidem iological Surveillance ("Gossanepidnadzor") of 
the Ministry of Health (MOH) was the federal executive authority in charge of ensuring 
sanitary-and-epidemiological well-being of the population. Protection of human health was currently regulated by Federal Law № 5487-1 of June 23, 1993 "Fundamentals of Health 
Legislation of the Russian Federation"; Federal Law № 52-FZ of March 30, 1999 "On 
Sanitary-and-epidemiological Well-Being of the Population"; Government Resolution № 554 of 
July 24, 2000 approved "Regulations of the St ate Sanitary-and-epidemiological Service of the 
Russian Federation" and "Regulations on State Sanitary-and-epidemiological 
Standardization"; and terms and provisions of  other federal laws and resolutions of the 
Government of the Russian Federation concerning provision of safety of goods and products for human health and environment (e.g. Federa l Laws "On Environmental Protection"; "On 
Consumer Rights Protection"; and "On Qualit y and Safety of Food Products"). Under the 
current legislation, goods produced by domestic manufacturers and sold on the territory of the 
Russian Federation should comply with sanitary  norms and hygiene sta ndards. Sanitary norms 
and hygiene standards for foodstuffs should  be science-based. Leading scientific-research 
institutes of the Russian Academy of Medical Sciences, departments of medical colleges and other interested institutions should participate in  their development. Existing sanitary rules and 
hygiene standards for foodstuffs should be harm onized with directives and recommendations of 
the Codex Alimentarius Commission.  All products produced in and imported into the territory of the Russian Federation for 
distribution to the population and/or use in industrial production, agriculture, civil 
construction development, for transport requi ring direct human involvement, or for private 
and household use, had to conform to the requi rements of sanitary-and-epidemiological rules, 
norms and hygienic standards (Art icles 13, 15, 16 of Federal Law № 52-FZ). Such conformity 
should be confirmed by a sanitary-epidemiol ogical approval or a registration certificate. A 
sanitary-and-epidemiological report was not conf irmation of conformity of certain products 
and goods with the requirements of sanitary le gislation (this was the responsibility of the 
producer or supplier), but only a statement that the certain type of product was in conformity 
with the sanitary legislation, under strict impl ementation of established requirements and rules 
during production, transportation, storage and sale  of products. As a rule, hygienic assessment 
of imported products had to be performed prior to  delivery of products into the territory of the 
Russian Federation. Imports of products that  had not passed a prior hygienic assessment 
procedure had to be subjected to hygienic exam ination resulting in a hygienic report valid for 
such particular consignment only. In connectio n with the adoption of the Federal Law "On 
Fundamentals of Technical Regulation in the Russian Federation" dated December 27, 2002 №  WT/ACC/SPEC/RUS/29 
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184-FZ all obligatory products requirements wo uld be set forth in technical regulations 
(general and specific ones). Corresponding ame ndments and additions would be made to the 
above mentioned legislative acts for them to  be in compliance with the Federal Law "On 
Fundamentals of Technical Regulation in the Russian Federation". 
 
Government Resolution № 987 of December 21, 2000 "On State Surveillance and Control in 
Ensuring the Quality and Safety of Foodstuffs" distinguished between the functions of the authorities and institutions of the State Veteri nary Service of the Russian Federation and the 
State Sanitary-and-Epidemiological Service of th e Russian Federation for the conduct of expert 
reviews of animal products. A sanitary-and-epid emiological conclusion on imported goods was 
confirmation of their conformity with the requirements of sanitary legislation. When goods 
were exported, the State Veterinary Service of  the Russian Federation should certify that 
animal products were safe from a veterinary  viewpoint and complied with veterinary norms 
and requirements. The veterinary certificate could not be duplicated.  
Pursuant to Article 14 of Federal Law № 52-FZ, chemical, biological substances and certain 
types of products presenting potential hum an hazards were allowed for production, 
transportation, procurement, storage, sale and u se only after their state registration based on a 
sanitary-and-epidemiological conclusion under th e results of research, tests and examination. 
Federal Law № 52-FZ (Article 43) also provided that chemical and biological substances not 
previously industrially produced or used, and preparations thereof presenting potential human 
threat, certain types of products presenting potential human threat, and certain types of 
products including food products imported into the Russian Federation for the first time should 
be subject to state registration. State registration of the above substances and types of products was to be based on the assessment of threat p resented by the substances and certain types of 
products for human life and health and enviro nment according to regulatory documents and 
assessment guidelines approved by the Ministry of  Health of the Russian Federation. Federal 
Law № 109 of July 19, 1997 "On Safe Use of Pesticides and Agrochemicals", and other 
regulatory acts subsequently approved, determined the procedure of State Registration in the territory of the Russian Federation. This proce dure included a mandatory toxic-hygienic expert 
review of pesticides and agrochemicals to be carr ied out by the MOH on the basis of a thorough 
assessment by scientific research institutions a ppointed by the MOH. The list of pesticides and 
agrochemicals permitted or prohibited for use was drawn up by the Ministry of Agriculture 
(MOA) as approved by the MOH. State regist ration of the above mentioned products 
constituted a single unified procedure in the form of sanitary-and-ep idemiological assessment, 
preparation of the sanitary-and-epidemiological co nclusion and state registration based on the 
above. 
 
The Federal Laws № 52-FZ of March 30, 1999 "On Sanitary-and-epidemiological Wellbeing of 
the Population", № 29-FZ of January 2, 2000 "On Quality and Safety of Foodstuffs", 
Government Resolution №988 of December 21, 2000, "On the State Registration of New 
Foodstuffs, Materials and Items" imposed uniform requirements when conducting state 
registration of new foodstuffs, materials and it ems newly developed and first produced in the 
territory of the Russian Federation (Russian goods), and for goods imported into the Russian 
Federation for the first time. State registr ation of imported foodstuffs was under the 
competence of the MOH. Approval of the MOA was required only for approval of a specific product of animal origin. 
 
A sanitary-and-epidemiological conclusion or a regi stration certificate is issued for any type of 
product for the whole period of industrial produc tion in the case of Russian products, or the WT/ACC/SPEC/RUS/29 
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period of supplies in the case of imported produc ts. State registration of potentially hazardous 
substances and types of products was to be performed by the MOH and, in the case of new food 
products of animal origin, by the MOH in co njunction with the MOA (Government Resolution 
№ 262 of April 4, 2001 "On State Registration of Certain Types of Products Presenting 
Potential Threat for Human Life and Health and Certain Types of Products First Imported to 
the Territory of the Russian Federation"; Government Resolution № 987 of December 21, 2000 
"On State Surveillance and Control in Ensuring Quality and Safety of Food Products"; and Government Resolution № 988 of December 21, 2000 "On State Registration of New Food 
Products, Materials and Items"). Lists of products  subject to state registration were attached to 
the above Resolutions. State registration had to  be launched from January 1, 2003, but at 
present a draft of a Resolution of the Government of the Russian Federation which would delay 
the date of entry into force of state registrati on till 2006 was prepared, approved by interested 
federal bodies of executive power and submitted to the Government of the Russian Federation 
for approval. The Requirements and criteria with  respect to safety of products for human 
health and the environment pursuant to Articles 1, 2, 12, 13, 15, 16, 37, 38, 39, 41, 42 of Federal 
Law № 52-FZ were implemented by state sanitary -and-epidemiological rules and norms which 
were regulatory legal acts and binding on all citizens, individual entrepreneurs and legal entities. All regulations within the territory  of the Russian Federation were implemented 
through federal rules approved and enacted by the MOH.   The State Sanitary-and-epidemiological Service of  the Russian Federation was a single federal 
centralized system of agencies and institutions , consisting of a federal executive authority 
(MOH – Gossanepidnadzor) chaired by the Chie f State Sanitary Expert of the Russian 
Federation – First Deputy Minister of Health of the Russian Federation centres for state sanitary-and-epidemiological surveillance in Ru ssian Federation regions, areas, transport 
(water transport and aircraft) and state research  and other institutions with vertical 
subordination. Pursuant to Russian legislation, an  applicant had the right to appeal a decision 
of Gossanepidnadzor following administrative or judicial procedures. The procedure for 
sanitary-and-epidemiological examination of prod ucts, types of products and the procedure for 
issuing a sanitary-and-epidemiological report on th e conformity of products with state sanitary-
and-epidemiological rules and norms were estab lished under the Procedure for Conduct of a 
Sanitary-and-Epidemiological Examination of Products, approved by MOH Order №325 of 
August 15, 2001 with amendments and additions approved by the Order №84 of March 18, 
2002. This Order gave detailed list of products  subject to sanitary-and-epidemiological 
examination, set up the 5 years validity for a sanitary-and-epidemiological conclusion for a 
certain type of a product and 1 year - for a test batch of a product. A sanitary-and-epidemiological report ascertaining the conformity of products with the available sanitary rules 
and hygienic norms and based on the results of a sanitary-and-epidemiological examination of 
products by one of the Gossanepidnadzor centres , is valid everywhere in the territory of the 
Russian Federation.  After state registration with the Ministry of Justice (MOJ) of the Russian Federation, all 
regulatory legal acts of the MOH had to be pu blished in official press organs: Rossiyskaya 
Gazeta (the Russian Newspaper), the Bulletin of regulatory acts of Federal Executive 
Authorities of the Administration of the Presi dent of the Russian Federation (Presidential 
Decree № 763 of May 23, 1996 "On the Procedure for Publication and Taking Effect of Acts of 
the President of the Russian Federation, the Government of the Russian Federation, and 
Regulatory Legal Acts of Federal Executive Auth orities"); the Bulletin of regulatory documents 
and guidelines of Gossanepidnadzor of the Ministry  of Health; and various specialized scientific 
journals and manuals (Nutrition Care, Health  Care at Work Place, Radiation Hygienics,  WT/ACC/SPEC/RUS/29 
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Toxicology Newsletter, etc.). Draft sanitary rules were published in the "Newsletter of the 
Russian Enquiry Point" and specialized journals. Regulatory documents took effect not earlier 
than three months after their approval, unless a direct threat to human health and life was 
involved. A Russian TBT and SPS Enquiry Point had been set up and was functioning, 
supplying all relevant information on SPS issues as noted in paragraph […]. In connection with 
the adoption of the Federal law "On Fundamentals of Technical Regulation in the Russian Federation" legislative and administrative procedures would be revised, specified and improved in accordance with the developed Inte r-Agency Program of measures to ensure full 
compliance with the requirements of WTO Agre ement on Technical Barriers to Trade and 
WTO Agreement on the Application of Sanita ry and Phytosanitary Measures in 2002-2005. 
 
The Federal executive authority in charge of  veterinary control over imports of animal 
products was the MOA (Veterinary Department).  The procedures of the State Veterinary 
Service were regulated by Federal Law № 4979-1 of May 14, 1993 "On Veterinary Service", 
and other federal laws and regulatory legal acts made pursuant thereto (Government 
Resolution № 830 of October 29, 1992 on "Regulations on the State Veterinary Service of the 
Russian Federation for Protection of the Russian  Territory Against Importation of Infectious 
Animal Diseases from Abroad "; Government Resolution № 706 of June 19, 1994 on 
"Regulations on State Veterinary Surveillan ce in the Russian Federation"; Government 
Resolution № 1263 of September 29, 1997 on "Regulations  on the Procedure for Examination of 
Low Quality or Hazardous Food Input an d Products, Their Use and Destruction"; 
"Regulations on Division of Functions of St ate Veterinary Surveillance in Processing and 
Storage Enterprises of Animal Products" № 13-7-2/173 of October 14, 1994 approved by the 
Chief State Veterinary Inspector of the Russian  Federation; Instruction "On the Procedure for 
Issuance of Veterinary Accompanying Docu ments for Cargoes Controlled by the State 
Veterinary Surveillance Agency" № 13-7-2/871 of April 12, 1997 approved by the MOA; the 
Government Resolution № 987 of December 21, 2000 "On State Surveillance and Control in 
Ensuring Quality and Safety of Food Products" and the Decision of the Government of the Russian Federation № 26 of January 18, 2002 "On the State Registration of Feedstuff Received 
from Gene-Engineering-Modified Organisms”.   
 
Developments in legislation on cert ification, quality and safety of products made it necessary to 
update Federal Law № 4979-1 of May 14, 1993 "On Veterinary". Amendment and 
supplementing regulations were currently in prep aration. Changes would affect the structure of 
the State Veterinary Service of the Russian Federation and the organization of veterinary and sanitary surveillance. Veterina ry requirements with respect to domestic and imported cargoes 
controlled by the state veteri nary services were th e same as provided under Federal Law № 
4979-1 of May 14, 1993 "On Veterinary", Articles 14, 15, 18. The list of controlled cargoes was 
contained in letter № 13-8-01/3009 of May 16, 2000 of the Veterinary Department of the MOA. 
Imports of cargoes controlled by the State Vete rinary Service required authorization of the 
Chief State Veterinary Inspector of the Russian Federation or his deputies, and in accordance with the veterinary-and sanitary requirements fo r imports of the mentioned cargoes into the 
Russian Federation. Cargo entering the Russian  Federation had to be accompanied by the 
original veterinary certificates of the exporting coun try, issued by the state veterinary service of 
the country of production and guaranteeing comp liance with all provisions of the certificate.  
 The Russian Federation had agreed forms of vet erinary certificates for all types of animal 
products with the state veterinary services of  most exporting countries. Import of animal 
products under approved veterinary certificat es was not a mandatory procedure. In the 
absence of approved veterinary certificates, anim al products were exported to the Russian WT/ACC/SPEC/RUS/29 
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Federation under general veterinary certificates.  The actual import conditions were contained 
in the veterinary certificate. The list of cargo es controlled by the State Veterinary Service had 
been compiled in accordance with the Goods No menclature of Foreign Economic Activity and 
only included those items which may be a source of  infectious animal diseases or poisoning, and 
threaten the life and health of animals and people.  
 International cooperation in the field of veteri nary was carried out on the basis of bilateral 
cooperation agreements 
and also pursuant to the Code of the International Epizootics Office 
(IEO) and by virtue of Federal Law № 4979-1 of May 14, 1993 "On Veterinary" . For those 
countries that had not agreed veterinary certific ates with the Russian Federation, import of 
cargoes was governed by "Veterinary and Sanita ry Requirements for Imports into the Russian 
Federation of Cargoes Controlled by the Stat e Veterinary Service", approved by the Chief 
State Veterinary Inspector of the Russian Federation and letter № 13-8-01 of 
December 23, 1999 issued by the MOA.   
Imports of controlled cargoes into the Russian  Federation were restricted to designated 
cross-border checkpoints at railway and car stations , at seaports, airports and other specially 
equipped places open for international communi cations and having cross-border veterinary 
checkpoints installed. To be able to bring cont rolled cargoes (as imports or in transit) regulated 
by the Convention on International Trade in  Endangered Species of Wild Fauna and Flora 
(CITES), in addition to the above documents the owner of the cargo needed to have a permit 
from the CITES agency in the exporting country (in the Russian Federation the CITES agencies were the Ministry of Natural Reso urces, and State Committee of the Russian 
Federation on Fishing - on sturgeon species of fish).  The international transit of cargo controlled by the State Veterinary Service through the 
Russian Federation was conducted in accordan ce with the provisions of the International 
Epizootics Office’s International Veterinary Code . Written authorization from the Chief State 
Veterinary Inspector of the Russian Federation was not required for international transit of 
raw produce and products of animal origin th rough Russia. When crossing the border of the 
Russian Federation the cargo was inspected by the State Veterinary Inspector of the 
appropriate cross-border surveillance veterinary ch eckpoint and, if requirements of integrity of 
packaging, conformity of labeling to transpor t documents and existence of the exporting 
country’s original veterinary certificate were fu lfilled, a "transit permitted" stamp was placed 
on the original veterinary certificate upon import  to Russia. International transit of live animals 
through the Russian Federation required writte n authorization from the Chief Veterinary 
Inspector of the Russian Federation, on the ba sis of a request from the central veterinary 
authority of the importing country, indicating the points of import, export, route, stops, 
transfers and animal feeding sites.  Where permits for transit through third countries ha d to be obtained, such formalities were the 
responsibility of the owner of the cargo. Intern ational transit required permits from central 
state veterinary agencies of importing countries,  both destinations of the cargo and transit 
territories. The itinerary of the cargo also  had to be agreed with such agencies.  
 Imports and exports of pedigree animals required that the owner of the animals obtain (as well 
as the permit of the Chief State Veterinary Inspector of the Russian Federation and a 
veterinary certificate) an "extract from the state registry of selection achievements allowed for 
use, with respect to the imported plan t seeds or pedigree animals" for imports or  "confirmation 
of compliance with the requirements with respect to protection of patent holder rights with  WT/ACC/SPEC/RUS/29 
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respect to the exported plant seeds or pedigree animals" for exports, signed by the Deputy 
Minister of Agriculture of the Russian Federati on. Imports of veterinary preparations were 
regulated by Government Resolution № 1539 of December 25, 1998 "Regulations on Imports 
into and Exports from the Russian Federation  of Medicines and Pharmaceuticals". Once 
enacted, all new instruments of veterinary legislation were published in the journals 
"Veterinary Science and Practice", "Veterin ary Newspaper", the newspaper "Veterinary 
Consultant", and other special publications.  Policies on plant quarantine were determined by the MOA, with actual quarantine being 
implemented, within the Ministry, by the State Service for Quarantine of Plants. Regionally, 
phytosanitary controls were implemented by state inspections for quarantine of plants 
conducted in the different regions of the Russi an Federation. Cross-border phytosanitary 
controls at Russian checkpoints were perfor med by cross-border plant quarantine points, and 
local quarantine of plants was performed by dist rict and inter-district plant quarantine points 
of the regional inspections. Import quarant ine permits were issued under Government 
Resolution № 268 of April 23, 1992 "On State Service for Quarantine of Plants in the Russian 
Federation", as amended and supplem ented by Government Resolution № 1143 of October 1, 
1998. The list of products subject to phytosanitary  control, indicating codes according to the 
Goods Nomenclature of the Foreign Economic Acti vity of the Russian Federation, was provided 
in the "Nomenclature of Main Types of Pro ducts, Cargoes and Materials (Goods) Subject to 
Quarantine, for which imports into and expo rts from the Russian Federation required 
authorization by the agencies of the State Service for Quarantine of Plants of the Russian 
Federation". This latter Nomenclature was a pproved by the MOA on March 19, 1999 upon 
agreement with the SCC, and was binding both  for the agencies of the State Service for 
Quarantine of Plants and the agencies of the SCC.  
With regard to imports of seeds and planting st ock and some other products assigned for a 
number of regions were issued by State Service for Quarantine of Plants of the Russian Federation. Import quarantine permits relating to  imports of fresh vegetables, fruits and a 
number of other products subject to quarantine control which were destined to be used in a 
certain region were issued by State Quarantine Inspection of the relevant subject of the Russian 
Federation. To obtain an import quarantine  permit, the consignor had to apply to the 
corresponding inspection or Rosgoskarantin. Th e application had to state the product in 
question, the country of origin, the country of export, volumes, timeframe for collection, 
destinations and cross-border checkpoints for impo rts of such products subject to quarantine 
(Government Resolution № 268 of April 23, 1992 "On State Service for Quarantine of Plants in 
the Russian Federation"). An import quarantine permit indicated ad hoc  phytosanitary 
requirements for each consignment of products subject to quarantine (including the product 
type, order of its usage and sale), and require d that each consignment be accompanied by a 
phytosanitary certificate confirming conformity of  the phytosanitary qualities of the product to 
the said requirements. A phytosanita ry certificate needed to be issued by agencies of the state 
service in charge of the quarantine of plants in  the exporting country. Phytosanitary measures 
maintained by the Russian Federation met the recommendations and principles of 
International Plant Protection Convention (Rom e, 1997) the new text of which the Russian 
Federation had acceded to, as well as those  of the European and Mediterranean Plant 
Protection Organization (of which he Russian Federation (USSR) was a member since 1957 and 
an executive member since 1997). The Federal La w"On Fundamentals of Technical Regulation 
in the Russian Federation" dated December 27, 2002 № 184-FZ contained obligation to use 
scientific grounds for phytosanita ry measures taking into acco unt international principles 
(standards) in this field. To ensure transpa rency of phytosanitary measures in the Russian WT/ACC/SPEC/RUS/29 
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Federation the support unit of MOA was operating within the united national information 
center (Enquiry Point) functioning at Gosstandart of Russia.   After entry into force of the Federal Law "On Fundamentals of Technical Regulation in the 
Russian Federation" dated December 27, 2002 № 184-FZ all requirements of the WTO SPS 
Agreement (such as predictability, transparency , scientific-based regulations, risk assessment, 
preparation of notification, non-discrimination, use of international standards, procedures of 
implementing of new regulations) would become mandatory.  Application of Veterinary and Sanitary Measures at Import of Live Animals, Animal Products 
and Feed by the Russian Federation: 
 1. Veterinary and sanitary measures are main tained by the Russian Federation based on 
the following legislative and regulatory acts: 
- Law of the Russian Federation “On Veterinary Service” of 14 May 1993, No. 4979-1 
- Regulation on State Veterinary Surveillan ce of the Russian Federation, approved by 
Resolution of the Government of the Russi an Federation of 19 June 1994, No. 706 
- Regulation on State Veterinary Service of the Russian Federation for Protection of the 
Russian Territory Against Importation of Infectious Animal Diseases from Abroad, approved by Resolution of the Government of the Russian Federation of 29 October 
1992, No. 830. 
 2.  The list of controlled products in provide d in Resolution of the Government of the 
Russian Federation of 29 October 1992, No. 830, and includes: 
- animals (including birds, ground game, labora tory animals, zoo animals and house pets, 
sea animals, bees, fishes, other hydrobiont s) genetic input (sperm, ovicells, embryos, 
cocoons, silk-worm eggs, larva); 
- products of animal origin (meat and meat  products, milk and dairies, fish, eggs, 
apiculture products); 
- animal inputs (hides, wool, fur, down, feather, endocrinal and enteral inputs, blood, 
bones and other types of inputs); 
- animal feed and feed additives; 
- veterinary preparations, biological materials and collectible items of animal origin. 
3.  The conditions to be fulfilled and guaran teed by exporting countries are contained in 
the veterinary requirements in respect of imports to the Russian Federation of animal cargoes, approved by the Veterinary Depart ment of the Ministry of Agriculture and 
Food of the Russian Federation on 23 December 1999. 
4.  Import of live animals, feed, animal inputs are subject to authorisation by the Chief 
State Veterinary Inspector of the Russian  Federation (Article 14 of the Law “On 
Veterinary Service”). Imports of finished pr oducts of animal origin that had undergone 
thermal treatment do not require such authorisation. 
5.  A Russian importer intending to import animals, products of animal origin, feed, other 
cargoes controlled by the veterinary serv ice to the Russian Federation must: 
 a) apply in writing to the state veterina ry surveillance agency of the corresponding 
Region of the Russian Federation for permission to import products from the specified country. The Chief Officer of the state vet erinary surveillance agency (Chief State 
Veterinary Inspector of the Region) considers the application on condition that the 
importer is able to provide proper conditions for storage and/or processing of products 
or for compliance with the quarantine pro cedures where the object imported is live 
animals;  WT/ACC/SPEC/RUS/29 
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 b) during import, inform the exporter (count ry of origin of animals or products) of 
the veterinary requirements applicable to the cargo in question (see par. 3). 
6.  Provided that the importer is able to provide proper conditions for keeping of animals, 
storage and/or processing of products of animal origin, the Chief State Veterinary 
Inspector of the Region submits a request to the Veterinary Department of the Ministry 
of Agriculture of the Russian Federation (Chief State Veterinary Inspector of the 
Russian Federation) indicating full details of the Russian consignee, the country of 
origin, type and size of cargo, purpose of im port, conditions of testing, requested cross-
border entry points, etc. Imports of finished  products are administered by the Chief 
State Veterinary Inspector of the Region in own discretion. 
7.  The Chief State Veterinary Inspecto r of the Russian Federation considers the 
submission from the Chief State Veterinary Inspector of the Region by reference to the epizootic situation in the exporting country, and issues permission or prohibition to 
import. The results are brought to the notice of the cross-border checkpoints concerned, 
and the submitting regional state veterina ry surveillance agency which passes them on 
to the Russian importer. 
8.  Granted the permission of the Chief State Veterinary Inspector of the Russian 
Federation, the animals or cargo may be imported to the Russian Federation subject to compliance with the veterinary requirements  (par. 3) declared in the veterinary 
certificate issued by the state veterinary  service of the exporting country and 
accompanying the consignment. 
9.  Where the exporting country is unable to  fully comply with the Russian veterinary 
requirements (see par. 3), the state veteri nary service of such country requests the 
Veterinary Department of the Ministry of Agriculture of the Russian Federation to 
consider using other conditions which may be deemed equivalent. The Russian party must study the materials submitted with such  request pursuant to Articles 4, 5 of the 
WTO Agreement on SPS. This may involve bilateral negotiations, a field inspection in 
the exporting country, assessment of the ve terinary service of the exporting country 
subject to chapters 1.3.1, 1.3.2, 1.3.3 of th e International Animal Health Code of the 
International Office of Epizootics (OIE Code) and article 6.3 of the SPS Agreement. Based on the findings, bilateral veteri nary agreements are made and bilateral 
veterinary certificates reflecting the require ments of Article 6 of the SPS Agreement 
initialled. During the period of preparation for the WTO accession Russia has implemented a series of measures to harmon ise its veterinary and sanitary measures 
with the SPS Agreement.  
 In 1999 the Requirements in respect of import to the Russian Federation of all types of 
animal cargoes were modified so that th ey became science-based and reflect OIE 
recommendations. 
10.  The above conditions being met, the cargo arrives at the cross-bord er entry point to the 
Russian Federation accompanied with a veterinary certificate, where it is examined by the officers of cross-border veterinary checkpoints. 
 Provided that the cargo corresponds to th e accompanying veterinary documentation 
(veterinary certificates) and is in prop er condition, the cross-border veterinary 
checkpoint issues a veterinary certificate valid for use in Russia and admits such cargo 
to the Russian Federation. 
 The government policy in respect of quarantine of plants is determined by the Ministry of 
Agriculture of the Russian Federation. Ac tual phytosanitary quarantine measures are 
implemented by agencies of the State Service for Quarantine of Plants and are led by the State 
Inspection for Quarantine of Plants of the Russian  Federation of the Ministry of Agriculture. WT/ACC/SPEC/RUS/29 
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Cross-border phytosanitary cont rols at Russian entry points are performed by cross-border 
plant quarantine checkpoints, and local quarantine of  plants is performed by district and inter-
district plant quarantine checkpoints of the regional inspections.   
Imports of products subject to phytosanitary co ntrol to the Russian Federation is performed 
based on import quarantine permits issued by the State Inspection for Quarantine of Plants of 
the Russian Federation and by regional inspect ions pursuant to Government Resolution No. 
268 of 23 April 1992 "On State Service for Quarantine  of Plants in the Russian Federation", as 
amended and supplemented by Government Reso lution of the No. 1143 of 1 October 1998). 
 
The list of products subject to phytosanitary co ntrol, indicating codes according to the Goods 
Nomenclature of Foreign Economic Activity of the CIS, is provided in the “Nomenclature of Main Types of Products, Cargoes and Materials (Goods) Subject to Quarantine, for which imports into and exports from the Russian Fede ration require authorisation by the agencies of 
the State Service for Quarantine of Plants of th e Russian Federation”. This latter Nomenclature 
was approved by the Ministry of Agriculture on 25 December 2001 by agreement with the State 
Customs Committee of the Russian Federation.   With regard to imports of seeds and planting stock and some other products intended for 
several regions, the import quarantine permit mu st be issued by the State Inspection for 
Quarantine of Plants of the Russian Federation . For imports of fresh vegetables and fruits and 
a number of other controlled products intended for use in a particular region, the import 
quarantine permit is issued by the regional st ate inspection for quarantine of plants of the 
corresponding Region.  To obtain an import quarantine permit the cons ignor has to apply to the applicable regional 
inspection or the State Inspection for Quarantine  of Plants (Rosgoskarantin). The application 
has to state the product in question, the count ry of origin, the country of export, volumes, 
timeframe for collection, destinations and cross-bord er entry points for import of such products 
subject to quarantine (pursuant to the Federal Law “On Quarantine of Plants”). An import 
quarantine permit indicates ad hoc  phytosanitary requirements for import of controlled 
product depending on its type, usage and distribution procedure.  
 Each consignment of controlled products must be accompanied with a phytosanitary certificate confirming conformity of the phytosanitary qua lities of the product to the terms of import 
quarantine permit. Such phytosanitary certificate is  issued by agencies of the state service in 
charge of the quarantine of plants in the exporting country.  
 Phytosanitary measures maintained by th e Russian Federation are based on the 
recommendations and principles of the International Convention on Plant Protection (IPPC, Rome 1997) the new version of which was subs cribed by Russia, and of the European and 
Mediterranean Plant Protection Organization acce ded to by the Russian Federation (USSR) in 
1957.  The Federal Law “On Technical Regulation” contains the rules of scientific justification of phytosanitary measures by reference to app licable international methods (standards). 
 
Transparency of phytosanitary measures in the Ru ssian Federation is provided by the Ministry 
of Agriculture section of the single Russian  TBT/SPS enquiry point run by Gosstandart of 
Russia.  WT/ACC/SPEC/RUS/29 
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268-271 - Government Procurement 
268-271 We invite Russia to respond to the requ ests of Members for further information in 
this area, including in relation to the stat us of new legislation under preparation in 
this field (eg the draft Federal law “On th e Purchases and Deliveries of Products for 
State Needs”). 
268-271 Please update the information on the pro posed federal law "On the Purchases and the 
Deliveries of Products for State Needs" and progress on your program of reforms. 
Russian Federation Response:  
 The draft federal law "On the Purchases and the Deliveries of Products for State Needs" was 
submitted to the Government of the Russian Federation on
 December 9 2002.  
This draft law is directed at the achieving the following aims: - creation of basic statutory legal act, which regulates procurement for state needs; 
- ensuring transparency of “procurement for st ate needs” mechanism; stimulation of fair 
competition and budget economy; 
- elimination of possibilities of abusive practice; 
- formation of the “procurement for state need s” legislation of the Russian Federation 
taking into account generally accepted intern ational rules and the legislation of foreign 
states and statutory legal acts of international organizations. 
-  
The draft federal law provides for the following regulations: 
- a number of restrictions for participation of foreign suppliers in the deliveries of 
products for state needs are removed and a clear regulation of the participation of foreign suppliers in the bids is established; 
- the access of intermediaries to participation in competitions and deliveries of products 
for state needs on condition of executing of particular qualifying requirements is 
granted;  
- the division into competitive and non-comp etitive bids methods (procurement from the 
sole supplier) is introduced; 
- the control functions over purchases of products for state needs delegated to the 
authorized state bodies are substantially extended; 
- the mechanism of requests providing for the participation in competition is presented; 
- the criteria of competitive requests` estim ates and the winner identification are 
established; 
- the securing of rights and legitimate interests  of those concerned with the placement of 
orders for delivery  of products for state needs is covered; 
- the scope of draft law is extended for all pu rchases and deliveries of products, made on 
the territory of the Russian Federation at the expense of federal budget, budgets of the 
subjects of the Russian Federation, off-budget funds of the Russian Federation and of the subjects of the Russian Federation; 
- the state support of enterprises of penite ntiary system and handicapped person funds, 
which complies with world practice, is provided for. 
272-275 - Regulation of Trade in Transit 
272-275 We invite Russia to respond in full to th e concerns already raised by us and other 
WTO Members (cf paragraph 273) and identif y the steps it has taken/will take to 
ensure the elimination of WTO-inconsistent measures, such as State Customs 
Committee Order number 631 of 27 Augus t 2001. The draft report should also 
include language recognising that WTO obliga tions to provide for freedom of transit 
(and associated disciplines on for example fees and charges) apply to all products and irrespective of the form that transit may take  (eg road, rail, air, pipeline or other fixed WT/ACC/SPEC/RUS/29 
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infrastructure).  This is relevant for exampl e in connection with the transit of energy 
products such as oil and gas. 
272-275 -  Please indicate the circumstances under which Russia applies special 
procedures on export goods in transit  through its territory and address Members’ concerns that less burdensome or restrictive means could be used. 
- Please provide more detailed  informat ion on the charges for transit escort 
and the reason such charges are applied. 
Russian Federation Response:  
 
Provisions of legislation in force  
 With regard to concerns of some WTO members  related to the SCC Order No. 631 of 2 July 
2001 "On the Application of Order of the State Customs Committee of the Russian Federation 
No. 25 of 15 January 2001" it was already stated  that this Order had been abolished by the 
SCC Order No.517 of 24 May 2002.  
 The Russian legislation provides freedom of transit  (in respect of fees and charges) applied  to all products and irrespective of the form that transit may  take as it is required in the SCC Instruction “On Levy of Customs Duties for Customs Legalization (adopted by the SCC Order 
No.1010 of 9 November 2000). The customs duties are not levied on the goods, transferred 
through the customs territory of the Russian Fe deration in accordance with the provisions of 
Chapter 6 of The Customs Code of the Russian Federation regulating the transit customs régime, and under the terms of the interg overnmental agreements and international 
agreements of the Russian Federation. In respect of customs duties applied to transit by air, 
water and pipeline, no charges are levied on the goods treated under the transit customs 
régime, if the customs body of departure concur rent with the customs body of assignment.  
 Provisions of the new draft Customs Code
 
 
According to the provisions of the draft Cust oms Code the requirements for transit régime 
regulating the issue of permission on transit on goods, for transit terms are the same states for 
the internal customs transit. According to Arti cle 6 of the draft Customs Code of the Russian 
Federation the internal customs transit is conducted upon the permission of customs body, that regulates the region of delivery by transit in a ccordance of the procedure of internal customs 
transit (further- the customs body of departure). 
 The permission on internal customs transit is issued  upon the observance of following requirements: - goods are not prohibited for entrance on custom s territory of the Russian Federation or 
for export thereto; 
- frontier control and other forms of contro l were conducted for the imported goods, if 
the goods are subject to such forms of contro l according to the Russian legislation in 
place of the departure on the customs territory of the Russian Federation; 
- permissions and (or) licenses are present on goods, if according to the Russian 
legislation transfer of the goods through th e territory of the Russian Federation is 
allowed upon the presence of such permissions or  licenses; 
- documentation and data are rendered, necessary  for issue of permission for internal 
customs transit according to Article 43 of  Draft Customs Code; 
- identification of goods is provided; 
- transport is duly equipped, if the goods a re delivered under customs seals and stamps;  WT/ACC/SPEC/RUS/29 
 Page 49 
 
 
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No. Comment 
- payment of customs duties is conducted acco rding to Chapter 35 of Draft  Customs 
Code. 
 For the obtaining of permission on transit the carrier or expeditor present the declaration on 
internal customs transit in customs body of depart ure, the list of which is stated by the federal 
executive body, authorized for customs matters,  depending on the form of transit, goods 
classification and characteristics and its packing.  As a declaration on transit the customs body of departure treats any transport or business 
document, if it contains all necessary data. 
 
If the data required by the customs bodies is not contained in transport or business document, 
that carrier or expeditor has, the indicated data should be contained in declaration on transit, 
filled according to the form, required by the fe deral executive body, authorized for customs 
matters. 
 
Any transport or business document   treated as an integral part of declaration is used for 
supply of data on goods.  The  transport or business document is marked by the customs body officer on receiving such a 
document or a part of it as a declaration. 
 In cases, treated by the international agreements  of the Russian Federation, the documentation 
required by these agreements may be used as a declaration on internal customs transit.  The draft Customs Code does not regulate the ca ses, when customs body may make a decision 
on customs escort of goods. Article 46 of Draft states that the customs escort of goods is applied 
only in specified cases, when other measures (th e payment of customs duties) are insufficient. 
 The simplified régime of customs legalization requires submission of unified customs declaration on goods for the specified peri od, during which such goods were transferred 
through the customs territory not once by the sa me person, issue of goods upon the submission 
of data, necessary for  goods identification, th e authorization of persons, conducting the 
transfer of goods  and other similar activities.  These simplified procedures  are permitted to 
establish for specified persons, observing the custom s legislation bona fide, keeping the books in 
such an order, that allows the customs bodies to compare the data with the data, supplied by 
the customs authorities upon the customs legalization and under other criteria, required by the 
federal executive body, dea ling with customs matters. 
 The customs control-the aggregate amount of me asures, authorized by the customs bodies in 
order to maintain the provisions of the customs legi slation. It is carried out in following forms: 
- documentation and data control; 
- verbal examination; 
- receiving of explanations; 
- customs supervision (visual survey of carriage of goods and vehicles under customs 
control, with application of technical equi pment, carried out by customs authorities 
officials, and conducting other operations with them); 
- observation of goods and vehicles; 
- customs survey; 
- personal survey WT/ACC/SPEC/RUS/29 
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- marking of goods by special marks or applying  on them special identification signs in 
cases, required by the federal executive authorities and other legislative acts; 
- examination of bookkeeping system; 
- control by auditing; 
- goods and vehicles registration; 
- premises control; 
- examination of financial activities. 
332-336 FREE TRADE AND CUST OMS UNION AGREEMENTS 
332-336 As noted in para 332, more informati on is needed on Russia’s FTA agreements with 
CIS countries.   Please indicate specifically, for each agreement, whether it is in force, i.e., ratified and whether substantially all trade covered is, in fact traded freely, 
and note the scope and nature of any exceptions to full coverage. 
- Please provide additional information on the specific aspects of the 
agreements that are the basis fo r the request for MFN exceptions. 
335 We seek the inclusion in this section of  full responses to questions and concerns 
raised by Members in Paragraph 335. 
Russian Federation Response:  
 
For intensification of reciprocal economic relat ions and stable development of economics the 
CIS countries signed the Treaty on the Creation of the Economic Union (September, 1993), 
which provides for the establishing of this union  by means of gradual deepening of economic 
integration via the creation of free trade zone, customs union, common market of goods, 
services, capital and labor, and also currency union. 
 For development of this Treaty the CIS co untries signed (except for Turkmenistan) the 
Agreement on Creation of the Free Trade Zone (April 15, 1994) and the Protocol on submission 
of changes and additions, which provides the in teraction of the CIS countries for solution of 
problems on the establishing of free trade zone , directed to gradual cancel of customs duties, 
taxes and charges and other limitations and obstructions for free movement of goods and 
services.  The Russian tariff exemptions in trade with the CI S countries are fixed in bilateral protocols to 
bilateral free trade agreements on 26 positions (spirit, vodka, sugar and tobacco goods) of more 
than 11 thousand positions of goods nomenclature.  At present such protocols are signed and 
came into force with Uzbekistan, Armenia, Ukra ine, Azerbaijan, Moldavia and Georgia (for the 
members of the Eurasian Economic Comm unity such protocols are not required). 
 The unit weight of goods, on which the tariff withdrawals are provided at the import to the 
customs territory of the Russian Federation from  the CIS countries, which are not participants 
of the Eurasian Economic Community, formed about 0,1% in 2001 and 0,2% - in the first half of 2002 of total volume of import from the CIS countries.  The unit weight of goods under the tariff exemptio ns exporting from the Russian Federation to 
the customs territory of  above mentioned states  in the total volume of export with the CIS 
countries in 2001 formed 0,36%, in first half of 2002 - 0,24 %.  In addition to the above mentioned treaty and protocol on it in the context of CIS 36 basic intergovernmental and intergovernmental documents, which regulate establishing and functioning of free trade zone, are concluded. 
  WT/ACC/SPEC/RUS/29 
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The establishing of the Customs Union in the co ntext of the Eurasian Economic Community is 
at the initial stage of this process. In whole since 1995 state- participants of the Customs union, and then of the Eurasian Economic Community, signed 57 documents, 48 of which came into 
force in Russia. 
 
__________ 
 
 