RESTRICTEDWORLD TRADE
ORGANIZATIONWT/ACC/RUS/38
23 June 2000
(00-2546)
Working Party on the
Accession of the Russian FederationOriginal:  English
ACCESSION OF THE RUSSIAN FEDERATION
Additional Questions and Replies
The Permanent Mission of the Russian Federation has submitted replies to questions raised
after the ninth meeting of the Working Party, held on 16-17 December 1998, with the request that
they be circulated to members of the Working Party.
_______________WT/ACC/RUS/38
Page i
CONTENTS
Page No. Question No.
II. ECONOMY, ECONOMIC POLICIES AND FOREIGN
TRADE
2. Economic Policies(a) Main directions of ongoing economic policies 1 1 - 19
IV. POLICIES AFFECTING TRADE IN GOODS
1. Import Regulation
(d) Other duties and charges 11 20 - 23
(e) Quantitative import restrictions, including prohibitions,
quotas and licensing systems13 24 - 29
(f) Import licensing procedures 15 30 - 31
(h) Customs Valuation 16 32 - 41
(m)
(n)Anti-dumping regime
Countervailing duty regime22 42 - 60
3. Internal Policies Affecting Foreign Trade in Goods
(a) Industrial policy, including subsidy policies 30 61 - 73
(b) Technical regulations and standards, including measures
taken at the border with respect to imports38 77 – 82
(d) Trade-Related Investment Measures (TRIMS) 42 83 - 84
(e) State-trading practices 44 85 – 864. Policies Affecting Foreign Trade in Agricultural Products 46 87 – 96
V. TRADE-RELATED INTELLECTUAL PROPERTY
REGIME
1. General(c) Membership of international intellectual property
conventions and of regional or bilateral agreements55 97 – 98
2. Substantive Standards of Protection, Including Procedures
for the Acquisition and Maintenance of Intellectual
Property Rights
(b) Trademarks, including service marks 56 99 – 100
(h) Requirements on undisclosed information, including trade
secrets and test data57 101
4. Enforcement 58 102 – 118VI. TRADE-RELATED SERVICES REGIME
1. General 67 119 – 120A. Horizontal Measures 68 121 – 123
B. Legal Services 70 124
C. Registration requirements 70 125
D. Licensing requirements 71 126 – 131
E. Forms of commercial presence 76 132 – 133F. Telecommunications 76 134 – 137
VII. INSTITUTIONAL BASE FOR TRAE AND ECONOMIC
RELATIONS WITH THIRD COUNTRIES
2. Economic Integration, Customs Union and Free-trade area
Agreements78 138 - 142WT/ACC/RUS/38
Page 1
II. ECONOMY, ECONOMIC POLICIES AND FOREIGN TRADE
2. Economic Policies
(a) Main directions of ongoing economic policies
- Pricing Policy
Question 1.  
Please provide a list of all products and services subject to price controls at the Federal level.
Please use HS 96 classifications for price contro ls on goods.  (We understand that these are, for
the most part, related to the output and activities of natural monopolies.)
Answer:
State regulation of prices (tariffs) in the Russian Federation is performed consistently with
Russia’s economic liberalisation which began in 1991. The following regulatory instruments currently
govern the implementation of price policies at the governmental level: Decree of the President of theRussian Federation No. 221 of 28 February 1995, and Resolution No. 239 of the Government of the
Russian Federation “On Measures for Regulating State Controls on Prices (Tariffs)”, of
7 March 1995, adopted in furtherance of the said Decree.
Pursuant to Resolution No. 239 of the Government of the Russian Federation of
7 March 1995, the state regulation of prices (tariffs) on the domestic market of the Russian Federationis carried out by the Government of the Russian Federation and federal bodies of executive power in
the following types of products and services:
Natural gas, oil gas, dry stripped gas (except as marketed by gas producers that are not
affiliated with the Russian joint-stock company “Gasprom”, joint-stock companies “Yakutgasprom”,
“Norilskgraprom” and “Rosneft – Sakhalinmorneftegas”, and such gas as is distributed to thepopulation and building co-operative societies), oil (associated) gas distributed to gas-processing
plants for further processing, wide range of light hydrocarbons, gas liquefied for household needs
(except as distributed to the population which falls under regional government – confusing in English)
(as amended by Resolution No. 865 of the Government of the Russian Federation of 30 July 1998);
- Nuclear fuel cycle products;
- Power and heat in respect of which tariffs are regulated by the Federal Energy
Commission;
- Transportation of oil and oil derivatives by trunk pipelines (amended by Resolution
No. 865 of the Government of the Russian Federation of 39 July 1998);
- Defence products;
- Raw diamonds and precious stones (amended by Resolution No. 773 of the
Government of the Russian Federation “On Amendments to the Procedure of Price(Tariff) Regulation in Precious Metals” of 30 June 1997);
- Prosthetic-orthopaedic appliances;
- Transportation of cargoes, railway loading and unloading operations;
- Passenger transportation, transportation of luggage, cargo and mail by railway
transport (except suburban shipments);
- Loading-and-unloading operations in ports, port duties, charges for passage through
internal waterways by vessels flying foreign flags;
- Ice-breaking fleet services;
- Flight control and ground control services;WT/ACC/RUS/38
Page 2
- Aircraft, passenger and cargo services;
- Certain services of postal and electronic communications, communication services in
respect of broadcasting of programmes of Russian state TV and radio organizations
as set out in approved schedules of the Government of the Russian Federation; and
- Vodka, liquors and other alcoholic products stronger than 28 proof, produced in the
territory of the Russian Federation or imported into the customs territory of the
Russian Federation (introduced by Resolution No. 131 of the Government of the
Russian Federation “On Measures for Stabilizing the Alcoholic Beverage Producing
Sector” of 8 February 1996 as amended by Resolution No. 915 of the Government of
the Russian Federation “On Amendments and Supplements to Standards and Rules of
Production and Marketing of Ethyl Alcohol and Liquors” of 31 July 1996).
Thus, at the federal level, state regulation of prices is for the most part related to the output of
natural monopolies.
Pursuant to Federal Law “On State Regulation of Tariffs for Power and Heat in the Russian
Federation” of 10 March 1995, the Federal Energy Commission (FEC) sets and regulates tariffs for
power on the federal wholesale market and regional energy commissions set and regulate
economically reasonable tariffs for power and heat provided by energy suppliers to end-users locatedin the territory of the respective Russian Federation regions.
In addition, Government Resolution No. 1559 of 28 December 1998 was issued to approve
the list of communication services for which state price (tariff) regulation on the domestic market of
the Russian Federation is performed by the Ministry of the Russian Federation for Antimonopoly
Policy and Support for Free Enterprise:
1. Domestic postal items: letters, post cards, parcels, money transfers
2. Domestic telegram
3. Provision of a long-distance telephone link (connection) through an automatic or
manually operated switchboard irrespective of a type device used by subscribers
4. Provision of trunk telegraph and telephone communications channels to organisations
funded by corresponding budgets
5. Distribution and broadcasting of All- Russia television and radio programs
6. Provision of access to the telephone network irrespective of the type of lines
employed by subscribers (wire or wireless lines)
7. Provision of a local telephone link (connection) payment for which is made up of:
a) in the event of user payment for the telephone communication services (subscriber
payment for the use of the subscriber's device):- payment for the provision of a subscriber line, whatever its type, for the
permanent use to subscribers;
- payment for the provision of a local telephone link (connection) depending
on its average duration per one subscriber;
b) in the event of time based system of payment of the telephone communication
services:
- payment for the provision of a subscriber line, whatever its type, for the
permanent use by the subscriber;
- payment for the provision of a local telephone link (connection) depending
on its actual duration measured in rated units.
Question 2.  
Can Russia confirm that there no longer exist any additional price control regulations at
sub-national levels, i.e., beyond those provided for in Russian Federation laws or resolutions
and administered by sub-national entities.WT/ACC/RUS/38
Page 3
If such regulations, either unofficial or official, exist, we would like to receive a list of the
oblasts/municipalities using price controls, and the products for which these controls continue to
exist.
Answer:
Pursuant to Resolution No. 239 of the Government of the Russian Federation “On Measures
for Regulating State Controls on Prices (Tariffs),” state price control in the domestic market of the
Russian Federation is performed by executive authorities of regional governments of the Russian
Federation in the following categories of products and services:
- Natural gas distributed to the population and building co-operative societies;
- Liquefied gas distributed to the population for household purposes (except gas to
refuel motorcars);
- Power and heat in respect of which tariffs are regulated by regional energy
commissions (see also answer 1);
- Solid fuel, furnace fuel for household use and kerosene distributed to the population;
- Transportation of passengers and luggage by all types of public transport whether
urban, including underground, or suburban (except railway transport);
- Payment for public utilities by the population;
- Funeral services;
- Water supply and sewage services;
- Mercantile surcharges on prices for medicines and goods of medicinal designation;
and
- Social services supplied to the population of the Russian Federation by state and
municipal institutions of social service (introduced by Resolution No. 473 of the
Government of the Russian Federation “On the Procedure for and Terms of Payment
for Social Services Provided to Elderly Citizens and Disabled Persons by State and
Municipal Social Service Agencies” of 15 April 1996).
The following are included in the schedule of services provided by shippers, suppliers and
distributors and traders in respect of which executive authorities of the regional governments of the
Russian Federation have the right to introduce controls on tariffs and surcharges:
- Marketing and mercantile surcharges on prices for products and commodities
distributed in Far North areas or territories of equivalent status with limited cargo
delivery periods;
- Mark-ups for products (commodities) distributed to public catering enterprises
affiliated with secondary schools, trade schools, secondary specialized educationalinstitutions and higher educational institutions;
- Mercantile surcharges for baby food (including concentrated products);
- Transportation of passengers and luggage by suburban railway transport upon
agreement with the Ministry of Communications of the Russian Federation (railroads)
and provided that the losses resulting from tariff regulation are reimbursed from therespective budgets of Russian Federation regions;
- Transportation of passengers and luggage by motor transport by intra-regional and
inter-regional routes, including taxis;
- Transportation of passengers and luggage by local airlines and local river and ferry
transport;
- Transportation of cargo, passengers and luggage by sea and river transport and
aircraft in Far North regions and territories of equivalent status; and
- Services supplied by enterprises of industrial railway transport on branch lines.WT/ACC/RUS/38
Page 4
Administrations of krais and oblasts are entitled to add to this schedule compiled by the
Government of the Russian Federation a group of consumer goods in which the prices will be
regulated at the expense of the respective krai or oblast. They will then create a subsidy to pay and
manage the disbursement of such fund (Part II of Article 56 of Law No. 2449-1 of the Russian
Federation “On Local Peoples Deputies Councils for Krais and Oblasts and Local Administrations forKrais and Oblasts” of 5 March 1992).
Question 3.  
Additionally, we seek specific information on the price regulation activities of the Federal
Agency for Food Market Regulation.
Answer:
Price control falls outside the competence of the state enterprise “Federal Agency for Food
Market Regulation” which is under the Ministry of Agriculture and Foodstuffs of the RussianFederation.
- Internal Taxation
Question 4.  
We seek clarification of Russia’s assessment of fe deral-level excise taxes.  Previously, according
to information which Russia provided to the Working Party, e.g., in WT/ACC/RUS/2, Russia’sexcise tax was calculated only on the basis of the customs value, not counting customs duties and
fees.  However, it has been reported to us that excise taxes on passenger vehicles, jewellery and
gasoline are now assessed on a basis which includes the customs duties and fees.
Could Russia confirm or clarify this issue?
Answer:
Pursuant to Federal Law No. 23-FZ “On Excise Taxes” of 7 March 1996, in respect of goods
imported to the territory of the Russian Federation and assessed at an ad valorem  excise rate, the
taxable base is the customs value plus the total of customs duties and levies payable.  As for goods
subject to specific excise taxes, the tax is calculated on the basis of the volume of excisable goods in
kind imported to the territory of the Russian Federation. Note that the tax legislation in force providesfor ad valorem  excise rates for automobiles with engine capacities of over 2500 cm3 and for
jewellery, and specific excise rates for gasoline.
Question 5.  
We would also like to know if Russian-made automobiles are assessed at a specific ( ad valorem )
excise rate.  If so, please explain why the method of tax application on imports (i.e., ad valorem )
is different, and how Russia reconciles this policy with the national treatment provisions of
Article III of the GATT?
Answer:
Pursuant to Article 4 of Federal Law No. 29-FZ “On Excise Taxes,” motorcars with engine
capacities of over 2500 cm3 are taxable for excise purposes. The excise tax is levied at a uniform rate
of 10 per cent for such automobiles (foreign or Russian-made).
See also Answer 4.WT/ACC/RUS/38
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Question 6.  
In addition, we seek clarification of the meth odology used for calculating VAT on inter-CIS
transactions, whether the problem of double-VAT has been removed, and if Russia still plans to
charge VAT at the point of destination in early 2000 (as was announced in WT/ACC/RUS/23,
reply to Question 1)?
Answer:
For the purposes of trade between the CIS countries, VAT is levied at the source. The effect
of this procedure derives from Article 10 of La w No. 1992-1 of the Russian Federation “On Value
Added Tax” of 6 December 1991, and Paragraph 17 of Instruction No. 39 of the State Tax Service of
Russia “On The Procedure of Calculation and Payment of Value Added Tax” of 2 October 1995. Both
documents have been submitted to the WTO Secretariat.
According to the draft Tax Code which has passed first reading by the State Duma, beginning
with the year 2000, and in any case as soon as customs posts are set up along the borders, goods
exported from the Russian Federation will be exempt from VAT and excise taxes, and these taxes will
be imposed at the time of importation of the goods into the territory of the Russian Federation.  No
exceptions will be made for CIS countries.
Question 7.  
Re the submission by the Govern ment in November 1998 to the State Duma of a number of tax
changes.
Could Russia please provide details of all of these changes?
Are all such changes, in partic ular the changes to VAT rates, consistent with Article III:2 of
GATT 1994, which forbids discrimination in domestic taxation against imported goods andservices?
Answer:
The Federal Law “On Amendments to the Law of the Russian Federation “On Value Added
Tax”” adopted by the State Duma on 12 March 1999, and approved by the Federation Council on
17 March 1999, contemplates reductions in the VAT rate beginning 1 July 1999, from 20 per cent to15 per cent, and beginning 1 January 2000, to 10 per cent.
However, the said Federal Law was vetoed by the President of the Russian Federation in
Letter No. Pr-420 of “On Rejection of Draft Federal Law “On Amendments to the Law of the Russian
Federation “On Value Added Tax” of 31 March 1999, addressed to the State Duma of the Federal
Assembly of the Russian Federation.
Question 8.  
VAT not be levied on certain exports for which prepayments have been made.  The implications
of this measure require an understanding of Russia's VAT rules.
Is VAT in Russia levied at source (and hence appl ies on all exports but not on any imports), or
at destination (and hence applies on all imports but not on any exports)?
If VAT is levied at source (and hence applies on all exports) will Russia commit not to introduce
this measure, which may be a prohibited subsid y within the meaning of Article 3.1(a) of theWT/ACC/RUS/38
Page 6
WTO Agreement on Subsidies and Countervailing Measures, or commit to remove this measure
prior to accession if it has already been introduced?
Answer:
Currently, VAT in Russia is charged on all Russian-made goods and all imported goods
except those originating from CIS countries.  VAT is not levied on imported goods originating fromCIS states.
As for the exported goods originating from Russia, other than goods exported to CIS states,
the VAT is refunded.  The export of Russian goods to CIS states is subject to VAT.
As regards exemption from VAT for up-front payments received by exporters for future
deliveries of goods, the Federal Law “On Amendments to the Law of the Russian Federation “On
Value Added Tax” adopted by the State Duma on 1 March 1999, and approved by the Federation
Council on 17 March 1999, provides a tax exemption in respect of pre-payments for exportingenterprises that have a production cycle of over six months.
Question 9.  
"Measures of external policy" involving spec ial VAT measures for domestic producers and
exemptions from or low customs duties on certain products.
We would appreciate detailed information on  these measures and the affected goods and
services.  Such measures may affect conditions of access to Russia's markets, and information
on them will be necessary for the bilateral ma rket access negotiations. We hope that these
measures will not involve any taxation measures which discriminate against imports in a
manner contrary to the provisions of Article III of GATT 1994 or confer any prohibited subsidy
within the meaning of Article 3 of the WTO Agreement on Subsidies and CountervailingMeasures.
Answer:
The measures in question have never been implemented. Proposed improvement of the
existing tax legislation dealing with exports of g oods to foreign countries will include an exemption
from VAT in respect of advance payments by foreig n customers with for future exports of Russian
goods with a long production cycle.
See Answer 8 herein.
- Statement on measures approved on 31 October 1998
Question 10.  
We would appreciate clarification of a number of the "measures of the Government of the
Russian Federation and the Central Bank of th e Russian Federation to stabilise the socio-
economic situation in the country", which we understand were set out in a document approvedby the meeting of the Government of the Russia n Federation that was held on 31 October 1998.
It refers to what appear to be a large numb er of measures affecting trade which have been
introduced or will be introduced - a number of which may not be consistent with the WTO
rules.  There was however no reference to this document in the lists of legislation in
WT/ACC/RUS/31/Add.1 of 10 December 1998 or Rev.1 of 11 December 1998, and was not
mentioned in WT/ACC/RUS/31 of 10 December 1998.WT/ACC/RUS/38
Page 7
Answer:
WT/ACC/RUS/31/Add.1 and the ot her documents contain federal laws and other regulatory
and statutory acts issued by the Government of the Russian Federation or signed by the President of
the Russian Federation. The Joint Statement by the Government of the Russian Federation and the
Central Bank of the Russian Federation is not a legal act per se  and the measures contemplated therein
have been implemented in legal acts described in the documents entitled “Development of Foreign
Trade Legislation in the Russian Federation”.
Question 11.  
"Tough control over the prices of goods and services of natural monopolies".
Could Russia explain what is meant by "tough price control"?  How exactly do "tough" price
controls differ from other price controls?
Could Russia please provide a full list of the organizations that will be regarded as monopolies
for the purposes of these measures?
We would appreciate a full list of the goods and services which will be subject to price control.
We would appreciate it if Russia would provide for each of those products and services full
details of the price controls that are maintain ed in the territory of the Russian Federation,
including those controls which are ma intained by sub-federal governments.
Answer:
Pursuant to Federal Law No. 147 of the Russian Federation “On Natural Monopolies” of
17 August 1995 (submitted to the WTO Secretariat), control over the activities of natural monopolies
extends to the following activities:
- transportation of oil and derivatives by main pipelines;
- transportation of gas by pipelines;
- services in respect of power and heat;
- railway transportation;
- services of transport terminals, ports and airports;
- services of publicly accessible electronic and postal communications.
Subsequent to the Joint Statement, the Government of the Russian Federation adopted
Resolution No. 253 of 3 March 1999, on measures to prevent unreasonable increase of costs of, prices
and tariffs for products and services for the above activities. The Resolution provides for price control
measures, namely, restrictions on the price and tariff increases for products and services of natural
monopolies supplied to enterprises and organizations in the first half of 1999 within price forecasts for
industrial producers (less light and food industry out put) made by the Ministry of Economy of Russia.
The MAP (Ministry for Antimonopoly Policy) of Russia and FEC of Russia are responsible
for fixing prices for products (including services) of natural monopolies based on the reasonable
itemized costs of such monopolies.
These measures will help prevent prices and tariffs for products and services of natural
monopolies from growing more rapidly th an the costs of industrial output.
See also Answers 1 and 2.WT/ACC/RUS/38
Page 8
Question 12.  
We note that a mechanism is being set up to  determine and impose maximum prices.  What
steps will Russia take to ensure that this acti vity will be conducted in harmony with commercial
arrangements and developments in the market?  Wh at specific steps will Russia take to ensure
that maximum price controls conform with Article III:9 of GATT 1994?  In particular underwhat legislative provisions will WTO Members and private entities have the right to register
and pursue their concerns with the relevant author ities, whether federal or sub-federal, about
the impact of price control measures?  Under th ese legislative provisions, what will be the
obligations of the authorities with whom these concerns are registered?
Answer:
Such legislation is not under development. Information on regulation of prices is contained in
Answers  1, 2 and 11, herein.
Question 13.  
"Expansion of commodity supply in response to solvent demand".  We would appreciate a full
list of the commodities which will be subject to such measures.  What supply expanding
measures will be applied to each of these commodities?
Answer:
The idea is that the supply of a commodity to the market will be expanded in response to the
market needs, i.e. depending on the available consumer demand for goods supplied by a producer.
There is therefore no list of such goods and no defined measures in respect of expanding their supply.
Also, see Answer 10.
Question 14.  
Reliance "on the regulatory and legal base and on an efficient supervisory system".
For each of Russia's existing or planned "administrative bans and various restrictions", we
would appreciate details of the relevant aspects of the regulatory and legal base and supervisory
system that Russia will be rely ing upon for their implementation.
Answer:
The Government of the Russian Federation and the Central Bank of the Russian Federation
do not have plans to introduce any specific new administrative measures. It is proposed to rely on the
existing regulatory and legal framework and modify it, where necessary, to improve enforcement
measures by the relevant executive authorities.
Question 15.  
"Reserves of ... essential commodities, including fu el and ...certain types of food and medicines
(that) will be promptly formed".
We would appreciate a list of the commod ities for which reserves are being formed.WT/ACC/RUS/38
Page 9
Given that the difficulties that the commodity reserves will address are localised and temporary,
is it Russia's intention that all such reserves w ill be dismantled when the present difficulties pass
and that this will be achieved without disrupting the market?
Answer:
The reserves of essential commodities of the Government of the Russian Federation were
formed pursuant to Resolution No. 1190 of the Government of the Russian Federation “On Measures
to Stabilise the Consumer Market of the Russian Federation” of 12 October 1998, for certain types of
agricultural products and foodstuffs (grain, flour, crushed grain, meats, vegetable oil, granulated
sugar, salt, matches and certain other basic commodities). The formation of such reserves was
conditioned by the present-day situation in the country and is a temporary measure. As for fuel
reserves, the Resolution provides for seasonal reserves in accordance with the existing standards,
which have been grossly under-supplied in the past several years.
Question 16.  
"Repayment by a number of CIS Member-States of a part of their debts for supplied fuel by
providing foodstuffs and other socially significant commodities".
Are we correct in assuming that this represe nts a move in Russian policy towards increased
trade on a barter basis?  If so, how can WTO Members be assured that they can compete on a
non-discriminatory basis?
Answer:
The supply of foodstuffs and other socially significant commodities by CIS countries in
exchange for energy sources is not a matter of expanding barter trade, but rather a forced measure in
the wake of the August 1998 crisis.
As of today Russia has reached agreements with Ukraine and Belarus on partial repayment of
their debts in respect of natural gas supplies by supplying foodstuffs and equipment to satisfy the
needs of Russian organizations maintained on the federal budget.
This mode of repayment of debts was proposed by the above CIS countries and Russia agreed
to consider this as a temporary and forced measure. There is, therefore, no basis for considering thisas an expansion of barter trade.
Question 17.  
"Measures ... to prevent the quoting of tariffs a nd rents in foreign currency and reference units,
with the exception of tariffs and rates in the sphere of external economic activity"
We would appreciate details of such measures.
Do these measures intend to ensure that the prices of domestically produced goods and services
must be quoted only in domestic currency as a condition of sale in Russia?  Given that theremay be circumstances where such measures coul d disadvantage foreign suppliers of competing
products, what adjustments will Russia make to ensure conformity with Article III:4 of GATT
1994?WT/ACC/RUS/38
Page 10
Answer:
This measures is aimed at counteracting the practices of quoting prices and tariffs in any units
other than the Russian ruble for the purposes of domestic commerce. Given the constant devaluation
of the ruble, this measure is designed to help restrain inflation. This measure embraces the marketing
of both Russian-made and foreign goods in the Russian domestic market.
Question 18.  
"The procedure of the sale of foreign currency re ceived from export contracts will be changed".
Could Russia please provide full details of this change?
Answer:
Paragraph 5 of Section 2L of the Joint Statement by the Government of the Russian
Federation and the Central Bank of the Russian Federation “On Measures by the Government of the
Russian Federation and the Central Bank of the Russian Federation to Stabilize the Socio-EconomicState of the Country” requires an increase in the amount of the compulsory sale of foreign currency
generated from export contracts to 75 per cent.
The said requirement was implemented in the following regulatory legal acts:
Federal Law No. 192-FZ “On First Priority Measures in the Sphere of Budget and Tax
Policies” of 29 December 1998, requires, in Article 18, that 75 per cent of the total foreign currencyrevenues of residents derived from the export of goods (works, services, intellectual activity output)
be sold through the authorized banks at the effective exchange within seven calendar days of
obtaining said revenues.
Residents still repaying credits (loans) in foreign currency received by them before Decree
No. 334 was signed with no less than 25 per cent of the foreign currency due to them undertransactions, made by them or on their behalf, involving export of goods (works, services, intellectual
activity output) were allowed to sell only 50 per cent of their revenues in foreign currency until fully
performing their obligations in respect of repayment of such credits (loans).
Question 19.  
"Proposals are being drawn up on a system of mechanisms to guarantee the repatriation of
export earnings and to ensure delivery of comm odities (goods, services) equivalent to the sum in
foreign currency that was transformed from th e Russian Federation in the form of advance
payment under import transactions".
- Could Russia please provide a full explanation of what is envisaged here?
- Precisely what measures will "guarantee the repatriation of export earnings"?
- Do the proposals cover Russia's reported ban on prepayments for imports of goods and
services?  If so, how can this ban be reconciled with Article XI:1 of GATT 1994 whichprohibits quantitative restrictions of any kind being maintained on imports, and with
Article III:4 of GATT 1994, given that prepayments may be still made in Russia for the
purchase of competing domestically produced goods and services.
- When will the ban on prepayments for imports be removed?WT/ACC/RUS/38
Page 11
Answer:
These proposals were implemented by the Bank  of Russia by issuing Instruction No. 519-U
“On the Procedure for Purchase of Foreign Currency by Resident Juridical Persons with Rubles on the
Domestic Currency Market of the Russian Federation for Payment Purposes under Contracts for
Import of Goods to the Russian Federation” of 22 March 1999. The Instruction stipulated that where
payments under an import contract are made before the goods cross the border of the Russian
Federation (i.e., before customs clearance of goods), the importer shall have the right to buy foreign
currency with Rubles in order to make such paymen ts as long as it makes a deposit with an authorized
bank in the amount transferred in payment for foreign currency. The bank will release the deposit only
after the goods are imported into the Russian Federation.
Instruction No. 519-U of the Bank of Russia of 22 March 1999 does not ban prepayment for
imported goods, but sets forth security requirements in respect of purchase of foreign currency with
Rubles for the purposes of prepayment for imported goods.
Pursuant to Instruction No. 543-U “On Certai n Aspect of the Procedure of Enforcement of
Instruction No. 519 of the Bank of Russia “On the Procedure for Purchase of Foreign Currency by
Resident Juridical Persons with Rubles on the Dome stic Currency Market of the Russian Federation
for Payment Purposes under Contracts for Import of Goods to the Russian Federation” of22 March 1999” of 14 April 1999, the amount of Rubles subject to placement at the deposit may be
decreased by the amount proportional to the amount  specified in one of the following documents:
- for the purposes of settlement under a letter of credit;
- where a guarantee of a non-resident bank is available in favour of a resident juridical
person as security for the performance of a non-resident’s obligation under an importcontract or refund of up-front payment (prepayment) made by the resident juridical
person;
- insurance contract according to which insurance is provided against the risk that the
foreign currency transferred by resident juridical persons under import contracts is
not returned, i.e. failure to deliver according to import contracts goods for whichprepayment has been made due to default by the non-resident payer (guarantor) or
due to acts of state authorities of the country of the foreign counteragent. Such
insurance contract shall be entered between the resident juridical person and a
resident insurance company licensed to provide insurance services including
insurance of export credits;
- where there is a bill of exchange issued by a non-resident acting as the counteragent
of a resident juridical person under an import contract, in favour of such residentjuridical person and guaranteed by a foreign bank;
- where the importer is a federal authority, a regional government authority or a state
unitary enterprise; or
- a special permit has been issued by a territorial branch of the Bank of Russia.
IV. POLICIES AFFECTING TRADE IN GOODS
1. Import Regulation
(d) Other duties and charges
Question 20.  
Has the temporary additional duty of 74 per cent on raw sugar that was imposed on
1 August 1998 been completely removed?  If no t, when will this duty be completely removed?WT/ACC/RUS/38
Page 12
Answer:
The temporary special duty for raw sugar in the amount of 74 per cent was completely
removed beginning 1 January 1999, by Resolution No. 1549 of the Government of the Russian
Federation “On Revocation of Temporary Special Duty for Raw Sugar and White Sugar” of
24 December 1998.
Question 21.  
We have heard reports that Russia is consider ing the introduction of a seasonal duty on sugar
imports.  Can Russia confirm that this is not the case?
Answer:
Seasonal duties for sugar in the amount of 45 per cent were introduced by Resolution No. 511
of the Government of the Russian Federation “On A pproval of Seasonal Duties Rates for Raw Sugar
and White Sugar Imported to the Territory of the Russian Federation” of 10 May 1999.
For raw sugar they will be maintained from 1 August till 30 November, for white sugar from
1 August till 31 January.
Question 22.  
After the temporary additional duty on raw su gar has been completely removed, can Russia
provide a commitment that:
- The temporary additional duty will not be introduced again in the future?
- Russia will otherwise abide by the stands till expectation in relation to raw
sugar?
Answer:
The Russian Federation again states that it will undertake, in its implementation of safeguard
measures, to adhere fully to the provisions of Article XIX of the GATT 1994 and the WTO
Agreement on Safeguards.
Question 23.  
WT/ACC/RUS/31 also states that the import surcharge of 3 per cent Russia imposed on 17 July
was introduced for balance of payments reasons.   However the coverage of this surcharge has
been revised, and from 15 October no longer applied to "basic foodstuffs, medicines and other
essential goods of social significance".  Ca n Russia clarify the products covered by this
measure?WT/ACC/RUS/38
Page 13
Answer:
Resolution No. 235 of the Government of the Russian Federation of 27 February 1999
revoked the 3 per cent import surcharge, as of 1 March 1999.
(e) Quantitative import restrictions, including prohibitions, quotas and licensing systems
Question 24.  
Please describe the substance and prospects for the proposed temporary ban on ethyl alcohol
imports until 1 January 2002.
Answer:
Federal Law No. 61-FZ “On Temporary Ban on Ethyl Alcohol Imports” of 31 March 1999,
took effect on 5 May 1999.
According to the above Law, imports of ethyl alcohol are temporarily prohibited until
1 January 2002, as a safeguard in order to establish full control over the domestic marketing of ethylalcohol and prevent the sale of vodka in avoidance of the required tax payments and, therefore, to
augment dramatically the revenues of budgets of all levels (federal, regional and local).
Question 25.  
Please describe the provisions and give a status report on implementation of Presidential Decree
No. 190 “On the Strengthening of the State Regu lation of the Production and Circulation of
Ethyl Alcohol and Alcoholic Products” which addresses regulation of alcoholic production and
marketing.  In particular, what is the rationale for the legislation?
Answer:
The Presidential Decree of the Russian Federation No.  1199 of 6 October 1998, to which the
question refers, was issued in response to a drastic increase in “illicit” (in avoidance of tax payments)production and marketing of vodka in the Russian Federation and the resulting lower revenues for
budgets of all levels of government (federal, regional and local).
The text of the Decree was submitted to the WTO Secretariat in November of 1998 for the
Ninth Meeting of the Working Party.
Question 26.  
Please describe in detail how the State will regulate production, importation, exportation, and
domestic distribution of alcohol and alcoholic beverages under this Decree and other provisions
of Russian law.
When will the Decree come into effect, and how will the quotas and licences be implemented?WT/ACC/RUS/38
Page 14
Answer:
In furtherance of Decree No. 1199 of the President of the Russian Federation of
6 October 1998, the Government of the Russian Federation issued Resolution No. 1159 “On
Enhancement of State Control over the Production and Marketing of Ethyl Alcohol and Liquors” of
6 October 1998, which was submitted by Russia to the WTO Secretariat in November of 1998 for theNinth Meeting of the Working Party.
See also Answers 20 and 23.
Question 27.  
Please indicate if quotas, restrictive licensing requirements, or other quantitative restrictions
are currently being applied on imports of ethyl alcohol or alcoholic beverages or if such
measures will be used in the future to implement the Decree.
How is this measure consistent with WTO rules?
Answer:
A temporary ban on the import of ethyl alcohol into the Russian Federation is currently  in
effect and will be maintained until January 1, 2002 (see Answer 20).  In the opinion of the Russian
Delegation, this ban is consistent with the provisions of Article XI:(c) of GATT 1994.
Question 28.  
Please provide a summary of the provisions of Government Resolution No. 1229 “On the
approval of rules of issuing quotas for production of ethyl alcohol from all types of materials
and special permission for its delivery”.  Please provide a status report on its implementation
and describe how it is related to Presidential Decree No. 190.
Answer:
Resolution No. 1292 of the Government of the Russian Federation “On the Approval of Rules
for the Issuance of Quotas for the Manufacture of Ethyl Alcohol from All Types of Raw Materials and
Special Permits for Its Delivery” (hereinafter “the Resolution 1292”) confirmed the rules for issuing
quotas for production of ethyl alcohol from all types of raw materials as well as denatured alcohol and
spirituous solutions (hereinafter “Rule No. 1”) togeth er with rules for issuing special permits for the
supply (sales) of ethyl alcohol produced from all types of raw materials, denatured alcohol and
spirituous solutions (hereinafter “Rule No. 2”) (the  Question seems to contain a typographical error –
the number of the Resolution is 1292 instead of 1229).
The Resolution 1292 was adopted to implement Decree No. 1199 of the Russian Federation
President “On Enhancing the State Regulation in the Sphere of the Production of and Trading in Ethyl
Alcohol and Alcohol Products” dated 6 October 1998 (this Question, like Questions 21 – 23, appears
to contain a typographical error – the number of the Decree is 1199 instead of 190).
Rule No. 1 defines the procedure for imposing quotas on ethyl alcohol production from all
types of raw materials, denatured alcohol and spirituous solutions, and applies to all authorized
producers included in the list referred to in Resolution 1764-r below.
Rule No. 2 defines the procedure for issuing special permits for supplies (sales) of ethyl
alcohol from all types of raw materials, denatured alcohol and spirituous solutions, and applies to allWT/ACC/RUS/38
Page 15
legal entities authorized to produce ethyl alcohol from all types of raw materials, including supplies
(sales) for domestic needs.
The following acts were adopted on the basis of the Resolution 1292:
- Resolution No. 1789-r of the Government of the Russian Federation dated
15 December 1998, which approved the List of entities authorized to produce ethylalcohol from alimentary raw materials;
- Resolution No. 1764-r of the Government  of the Russian Federation dated
11 December 1998 which approved the List of entities authorized to produce ethyl
alcohol, ethyl denatured alcohol and spirituous solutions from non-alimentary raw
materials.
- In addition, Resolution of the Government of the Russian Federation No. 237 dated
1 March 1997 was correspondingly updated (the registration procedure for alcoholmarketing was replaced with a licensing procedure).
The text of the Resolution 1292 will be submitted to the WTO Secretariat.
Question 29.  
Re. "Administrative bans and various restrictions may be applied" (Statement on measures
approved on 31 October 1998).
We would appreciate a list of the administrative bans and restrictions which currently apply in
Russia, or will apply in the future, incl uding where relevant a WTO justification.
Answer:
See Answer 14 herein.
(f) Import licensing procedures
Question 30.  
Concerning issues discussed in WT/ACC/RUS/27 - are the import licences for fruit liqueurs
(stronger than 28 per cent proof) automatic or non-automatic?
Answer:
Pursuant to Resolution No. 1590 of the Government of the Russian Federation “On Measures
for Regulating the Imports of Ethyl Alcohol and Vodka to the Customs Territory of the Russian
Federation” of 30 December 1996, and pursuant also to Resolution No. 114 of the Government of the
Russian Federation “On Measures for Regulating the Imports of Certain Alcoholic Products (stronger
than 28 proof) to the Customs Territory of the Russian Federation” of 2 February 1997, the imports of
vodka and certain alcoholic products to the customs territory of the Russian Federation may be
performed only under an import licence.
Licenses will be issued to any Russian entity in possession of a licence for the relevant type of
activity from the  Ministry of Taxes and Levies  of the Russian Federation.
This measure will not therefore handicap any active participants in foreign economic activity
in terms of import operations or restrict their choice of suppliers or volumes of imported goods.WT/ACC/RUS/38
Page 16
Please note that Resolution No. 114 of the Government of the Russian Federation “On
Measures for Regulating the Imports of Certain Al coholic Products to the Customs Territory of the
Russian Federation” of 2 February 1998, (submitted to WTO Secretariat) provides a list of strong
alcoholic drinks (stronger than 28 proof) subject to licensing.  This Resolution does not impose any
quantitative restrictions.
See also Answer 23.
Question 31.  
How is the introduction of mandatory licensing for a wide range of agricultural and other
products consistent with Russia’s stated intention to reduce non-tariff barriers, as set out in
WT/ACC/RUS/31?
Answer:
The licensing requirement introduced in Russia in 1998 –1999 extends to a limited number of
goods (only 3 per cent of total value of exports and 1 per cent of imports). The licensing is automatic
and is performed for the sole purpose of monitoring the movement of such goods.
This automatic licensing does not create any non-tariff barriers to foreign economic
operations and is entirely consistent with the terms of the WTO Agreement on Import Licensing
Procedures.
 (h) Customs Valuation
Question 32.  
Concerning State Customs Committee Order No. 757 of 1997, provided to the Working Party
for review - how does the reference price system provided for in this Order work in practice?
Answer:
Order No. 757 of the State Customs Committee of Russia of 24 December 1997 does not
provide for any «reference price system». This Order was issued to supplement and specify certain
provisions of Order No. 796 of the State Customs Committee of Russia of 29 December 1995 which
approved the «Interim Regulations on the Division of Powers in Respect of Control over the Customs
Value of Goods Between Customs Authorities of Different Levels». These Regulations stipulate thefunctions of customs authorities in respect of cu stoms value control and determines the procedure
(rules, criteria) for centralisation of certain functions of customs value control in the higher level
authorities. Among such criteria is the price range. The level on which the decision regarding customs
valuation will be taken depends on the range of the declared customs value per item.
According to Article 8 of the Customs Code of the Russian Federation there are four levels of
customs authorities in the Russian Federation:
- The State Customs Committee of the Russian Federation;
- Regional customs departments of the Russian Federation;
- Customs of the Russian Federation;
- Customs check-points of the Russian Federation.
Powers are divided between the four levels. In practice, depending on whose authority a
decision is attributed, the documents submitted by the declarant in confirmation of the declared valueWT/ACC/RUS/38
Page 17
are channelled to the customs authority of higher rank. Decisions pertaining to the authority of
customs and customs check-points are taken on the spot.
Decision-making on the level of State Customs Committee of the Russian Federation and
regional customs departments requires a more detailed prior investigation. Such treatment is due to
the risks associated with cases referred to the authority of the above agencies, i.e. where the price peritem is lower than the economic price in view of th e normal costs of selling the goods of such class
and type to Russia. Performance of such a “risks analysis” to uncover cases of falsification of customs
value is likewise recommended in CCC/WCO materials.
Before a decision is made in respect of the customs value, the goods may either be placed in a
warehouse (temporary storage warehouse or under th e customs warehouse regime) or made available
to the declarant for use against security of customs payments according to the interim (provisional)
valuation performed under Article 15 of Secti on 3 of the Law on Customs Tariff. The amount of
interim provisional valuation is provided in column 10 of Order No. 757.
Question 33.  
Please confirm that, under these provisions, if  the importer is unable to substantiate the
declared value, then the reference price will be used as the cu stoms value, rather than using the
hierarchy of appraisement provided for in the Ag reement.  If this is not so, please explain.
Answer:
As provided in Answer to Question 32, the Order does not provide any «reference prices» for
the purposes of customs valuation. According to general rules (Article 16 Section 2 of the Law of the
Russian Federation «On Customs Tariff») where no confirmation of the accuracy of the declared
customs value is given, the customs authority shall, at its sole discretion, determine the customs value
based on the methods provided under the above Law.
Thus, the system of centralisation of the functions provided under various Orders of the State
Customs Committee of Russia (No. 796 of 29 December 1995, No. 757 of 24 December 1997) affects
merely the choice of the customs authority to conduct the customs valuation. The customs valuation,
however, is in all cases based on the methods provided in the Law.
Question 34.  
While we understand the concept of valuation parameters to flag addition customs review,
actual application of the reference parameter price used appear to us to be prohibited by the
Agreement.  This is particularly unfortunate as the reference prices appear to be established at
about the 4 digit level of description, which normally encompasses a number of very different
commodities with possibly very different pric es, and as a consequence would constitute an
“arbitrary or fictitious” value, prohibited by the Agreement.
Please indicate how and when Russia intends to revise or repeal this Order to bring it into
conformity with the Customs Valuation Agreement.
Answer:
The system of centralisation of functions does not constitute a violation of the requirements of
the Agreement on Customs Valuation, Article VII GATT-94 and Agreement on Implementation of
Article VII of GATT-94. Recommendations to centralise the functions of customs authorities in
respect of control over the customs value may be found in the Customs Valuation Training Course,
CCC, 1992, lesson 35. According to the Course, centralisation helps achieve higher professionalismWT/ACC/RUS/38
Page 18
of experts, consolidation of information on trade processes in general, provides opportunities for more
through examination, etc. These tasks are very pressing for the Russian customs service because
commercial infringements involving manipulation with the value of the goods («double entry
bookkeeping») is one of the gravest problems today, which poses the most obstacles to the application
of the WTO customs valuation system in Russia.
Question 35.  
Article 13 of the WTO Customs Valuation Agreem ent requires that each Member’s legislation
contain provisions allowing an importer to withdraw the imported goods from customs, if the
importer provides sufficient guarantee in th e form of a surety, a deposit or some other
instrument covering the ultimate payment of customs duties. This provision applies when the
final determination of the customs value is delayed.  The Russian legislation contains provisions
similar to a guarantee system.  In order to determine whether Article 13 has been fully
implemented, we request the following information:
Please cite where Russia’s system is provided for in law.  Please explain how it works in
practice.
What percentage of imported goods currently are released on the basis of such a guarantee?
Are there any categories of goods or types of declarants that are excluded from using the
system?
Answer:
- Provisions of Art. 13 of the Agreement on Implementation of Article VII GATT-94 are
reflected in Article 15.3 of the Law of the Russian Federation «On Customs Tariff». The procedure
for practical use of this system is provided under Article 2.10 of the Regulations on the Procedure forand Terms of Declaring the Customs Value of Goods Imported into the Russian Federation, approved
by Order No. 1 of the State Customs Committee of 5 January 1994 (see pages 38 – 39 in
WT/ACC/SPEC/RUS/9).
In 1998, out of 1,153,435 customs cargo declarations for the import of goods to the Russian
Federation under the customs regimes of release for free circulation, temporary import and processingoutside the customs territory (import of end-product), approximately 95 thousand (94,140)
declarations, i.e. 8.1 per cent, were released against security of payment of customs charges.
This system of obtaining the opportunity to use the product before its customs valuation is
completed is applicable to all types of goods and available to all categories of declarants.
Question 36.  
Earlier, we reviewed copies of a 1998 Draft Tax Code containing customs valuation provisions.
WT/ACC/RUS/31 reported that the 1998 Tax Code was adopted.
Did the enacted Code contain any provisions concerning customs valuation policy or
procedures?  If so, do these supersede and replace the valuation provisions (Section III)
contained in the Law of the Russian Federati on No. 5003-1 of 21 May 1993 (with amendments),
and other documents referred to by Russia in its earlier responses on this issue?
Answer:
Only the first part of the Tax Code of the Russian Federation has so far been passed and took
effect. Part One does not provide for customs valuation of imported goods. There have been noWT/ACC/RUS/38
Page 19
legislative developments to amend or supplement Sections III and IV of the Law of the Russian
Federation «On Customs Tariff» of 21 May 1993, No. 5003-1.
Question 37.  
Please provide a status report on implementati on of any new customs valuation legislation,
which may have been provided for in the 1998 Draft Tax Code.
Answer:
See Answer 36 herein.
Question 38.  
We understand that there may also be new draft legislation amending Russia’s Customs Tariff
Law of 1993 (No. 5003-1).  Could the Russian delegation clarify where its revised valuation
legislation stands and when we can expect to see it?
Answer:
New customs valuation legislation is currentl y being considered for insertion in the new
Customs Code of the Russian Federation (and not in the Tax Code of the Russian Federation). The
structure and content of the new Customs Code have not been finally defined yet.
Question 39.  
We would like an explanation of the legal status of Letters of the State Customs Committee, of
Annexes to the Letters of the State Customs Committee (e.g. No. 07-11/12510 of 31 August
1995), and of Orders of the State Customs Committee.
In addition, how do importers receive notice of the Letters and the Orders, and how can
importers receive copies of the Letters, the Annexes to the Letters, and the Orders?
Answer:
The legal status of normative documents issued by the State Customs Committee is
contemplated in Article 11 of the Customs Code of the Russian Federation. According to the said
Article, such documents are binding on all customs authorities of the Russian Federation and other
state authorities of the Russian Federation, enterprises, institutions, organisations, irrespective of the
form of property and subordination, and officials and citizens.
Normative documents issued by the State Customs Committee of Russia shall be brought to
attention of participants of foreign economic activity (importers) through publications in mass media.
A monthly journal «The Customs Newsletter» («Tamozhennye Vedomosti») is published by the State
Customs Committee of Russia and contains norma tive documents with commentaries from senior
officials of customs authorities.
Besides, all normative documents subject to publication are submitted to fast growing
electronic reference databases, such as «Codex», «Garant», «Consultant+». The State CustomsCommittee of Russia has its own we b page entitled «SCC of Russia».WT/ACC/RUS/38
Page 20
Question 40.  
We have concerns that some of the relevant Cust oms decisions contained in the Letters and the
Annexes to the Letters of the State Customs Committee, that traders need to review and absorb,
are not available for this purpose.
Would Russia provide copies of the following documents:- Order of the State Customs Committee No. 796, dated 29 December 1995 (please note
that Annex 4 of WT/ACC/SPEC/RUS/9 has the date of this document as 1996);
- Order of the State Customs Committee No. 332, dated 30 May 1996; and
- Letter of the State Customs Committee No. 01-15/13231, dated 24 July 1996.
Please indicate how these and the other legal provisions relevant to Russia’s custom valuation
and customs clearance system can be accessed by traders, as provided in Article X of the GATT
and the WTO Customs Valuation Agreement?
Answer:
Order No. 332 of the State Customs Committee of Russia of 30 April 1996 was invalidated by
Clause 1 of Order No. 757 of the State Customs Committee of Russia of 24 December 1997
(submitted to the WTO Secretariat).
See also Answer 39 herein.
Question 41.  
Concerning customs fees:
- Could Russia provide the Working Party with a current list of any additional non-tariff
charges or fees, including the level of application and the legal citation establishing
them?
- Could Russia confirm that, along with those already identified, these are the only fees
and charges other than tariffs, and VAT and excise taxes applied to imports and
exports?
Answer:
Article 110 of the Customs Code of the Russian Federation provides an exhaustive list of
types of customs payments maintained in the terr itory of the Russian Federation. Apart from customs
duties, VAT and excise taxes, there exist customs charges and payments.
The main types of customs charges levied in the territory of the Russian Federation are (i)
customs charges for customs clearance of goods. The amount of customs charges for customs
clearance is determined by Article 114 of the Customs Code of the Russian Federation and amounts to
0.1 per cent of the customs value of the goods. An additional charge is levied on the customs
clearance of goods in foreign currency in the amount of 0.05 per cent of the customs value of thegoods.
The customs legislation provide for the right of the State Customs Committee of Russia to
reduce the amount of the above charges, grant exemptions and change the currency of the above
additional charge.
Another types of customs charges are (ii) customs charges for storage of goods.WT/ACC/RUS/38
Page 21
For storage of goods in temporary storage warehouses established by customs authorities,
where the goods have to placed before the customs clearance procedure, charges in the amount of
0.02 ECU are payable per one kilo of gross weight in each 24 hours, and storage of goods in specially
accommodated warehouses costs 0.03 ECU per one kilo of gross weight in each 24 hours.
0.04 ECU one kilo of gross weight and 3 ECU per vehicle in each 24 hours are charged on
placement of goods under the customs warehouse regime for storage at a customs warehouse
established by a customs authority.
The customs authorities may, upon agreement with the regional customs department, reduce
the rates of the charges for storage at a customs warehouse established by customs authorities, by half
at the maximum.
Payable in the Russian Federation are also (iii) customs charges for customs escort of goods.
The said charges are levied on escort of vehicles used for transportation of goods under customscontrol to temporary storage warehouses or the site of customs clearance.
Under Article 116 of the Customs Code and pursuant to Order No. 698 of the State Customs
Committee of Russia of 27 December 1994, customs char ges for escort of goods are payable in the
following amounts:
a) for customs escort of each motor and railway vehicle utilized either for the
transportation of goods, or which moves under its own power to be used as a
commodity:
- 20 minimum wages for customs escort of goods and vehicles for the distance
up to 50 km;
- 30 minimum wages for customs escort of goods and vehicles for the distance
from 50 up to 100 km;
- 40 minimum wages for customs escort of goods and vehicles for the distance
from 100 up to 200 km;
- 60 minimum wages for customs escort of goods and vehicles for the distance
over 200 km;
b) for customs escort of each peace of sea (river) vessel or an aircraft utilized for the
transportation of goods;
- 200 minimum wages irrespective of the distance of customs escort.
Besides the above listed customs charges the customs authorities (iv) levy charges for
issuance of licenses and renewals of licenses and (v) charges for issuance and renewals of
qualification certificates of a customs clearance expert.
According to the customs legislation, the customs authorities issue the following types of
licenses on which charges are payable:
1. A licence for establishment of customs warehouses. The amount of charges for
issuance of such licenses is as follows:
- in the amount of 1,000-fold minimal monthly wages established by the law, if the
overall warehouse area is up to 1,000 square meters inclusively;
- in the amount of 1,500-fold minimal monthly wages established by the law, if the
overall warehouse area is from 1,000 to 2,000 square meters inclusively;
- in the amount of 2,000-fold minimal monthly wages established by the law, if the
overall warehouse area is over 2,000 square meters.
2. A licence for establishment of duty free shops. The amount levied on the issuance of
such licence shall be equal to 5,000 minimum monthly wages.WT/ACC/RUS/38
Page 22
3. A licence for establishment of free warehouse. The amount levied on the issuance of
such licence shall be equal to:
- 2,000 minimum monthly wages, for a warehouse of up to 1,000 square meters
(inclusively) in area;
- 3,000 minimum monthly wages, for a warehouse of over 1,000 square meters in area;4. A licence for insertion of a bank or another credit institution in the registry of banks
acting as guarantors of customs payments. The amount levied on the issuance of such
licence shall be equal to 500 minimum monthly wages.
5. A licence to act as a customs broker. The amount levied on the issuance of such
licence shall be equal to 500 minimum monthly wages. To renew the licence of a
customs broker costs 1,000 minimum monthly wages.
6. A licence to act as customs carrier. The amount levied on the issuance of such licence
shall be equal to 500 minimum monthly wages. To renew the licence of a customs
broker costs 1,000 minimum monthly wages.
As was noted above, there is a charge for issuance and renewals of qualification certificates of
a customs clearance expert. Under the existing customs legislation, availability of such certificate is a
prerequisite for a person wishing to act as a customs broker.
The charge for issuance of qualification certificates is 20 minimum monthly wages. The
charge levied on renewal of a qualification certificate of a customs clearance expert is equal to 40
minimum monthly wages.
The Customs Code also provides for levy of payments for certain services rendered by the
customs authorities. Thus, the legal service of customs authorities provides consultations and informsthe participants of foreign economic activity of the existing customs rules. (vi) Payment for
information and consultation amounts to US$0.2 to US$50 depending on the amount of information
provided and short notice.
As for the (vii) payment for preliminary d ecision and (viii) payment for participation in
customs public auctions, the procedure for levying of such payments has not been set yet.
(m) Anti-dumping regime
(n) Countervailing duty regime
Question 42.  
Pursuant to Article 24 of Law No. 63-FZ On Protective Measures:  if a provision of the Law On
Protective Measures is inconsistent with an in ternational treaty of the Russian Federation,
would the treaty automatically override the Law or  would a legislative or regulatory change be
required?
Answer:
If a provision of the Law on Protective Measures is inconsistent with an international treaty of
the Russian Federation, the treaty will automatically override the Law if such a treaty is ratified by the
Russian Parliament (the State Duma).
Question 43.  
Concerning Article 7.2 of the Law On Protective Measures:  please explain the underlying
intent of that portion of Article 7.2 of the Law which states that measures shall be applied “with
due regard for the practice of application of anti-dumping measures in trade relations with that
foreign State (union of foreign States).”WT/ACC/RUS/38
Page 23
Answer:
The underlying intent of Article 7.2 of Federal Law No. 63-FZ is that where the national
legislation of a country provides rules for using antidumping measures which are different from the
WTO regulations (e.g. a special procedure for application of antidumping measures to non-Members,
or countries that are not members of a cert ain customs union, or those that have non-market
economies) and such rules are not defined in the inte rnational treaties between such countries and the
Russian Federation, the Russian Federation may apply antidumping measures in respect of such
measures.
Question 44.  
Article 7.2 of the Law states that measures “may” be applied on “an individual basis with
respect to the” subject merchandise “and to specific producers (exporters)”.  However, Article
6.10 of the WTO Anti-dumping Agreement requi res company-specific margins, unless the
number of companies or types of products is too large to make individual determinations
practicable.
In light of this, please explain how Article 7.2 is consistent with the WTO Anti-dumping
Agreement.
Answer:
Article 6.10 of the Agreement on Implementation of Article VI of GATT 94 states that the
authorities shall, as a rule, determine an individu al margin of dumping for each known exporter or
producer of the product under investigation. In cases where the number of exporters, producers,
importers or types of products involved is so large as to make such a determination impracticable, the
authorities may limit their examination either to  a reasonable number of interested parties or
products”. Thus Article 7.2 of the Law contains the obligation to determine as a rule an individual
margin of dumping for each known producer or exporter concerned of the product.
Question 45.  
“Normal course of trade” is defined in Articl e 2 of the Law as buying and selling at a price
equal to the “average weighted production cost and average profit calculated on the basis ofaverage weighted production, trade, administrative and general expenses.”  This appears to be
inconsistent with Article 2.2.1 of the Anti-dumpi ng Agreement, which permits treating sales
below “cost” (i.e., the cost of production, plus selling, general and administrative expenses,
without inclusion of profit ) as outside the ordi nary course of trade.  In short, below average
prices are potentially, according to the definition in Article 2, outside the normal course of trade
- even though they may be above “cost”.
Please explain this apparent potential inconsistency.WT/ACC/RUS/38
Page 24
Answer:
The notion of “the ordinary course of trade” as defined in Article 2 of Federal Law No. 63-FZ
is consistent with sections 2.2.1 and 2.2.2 of Article 2 of the Agreement on Implementation of Article
VI GATT which provides the definition of the above concept. The law does not prohibit to consider
sales without profit as being “in the ordinary course of trade”. In such a case a profit margin onlyequals zero.
Question 46.  
Article 8.2 of the Law provides that, if normal cost cannot be determined on the basis of prices
in the country of export because (i) domestic sales are inadequate, (ii) merchandise is merely
transhipped through the country of export, or (iii) “the exporters country uses different
methods of determining normal commodity cost in the conduct of anti-dumping investigations”,
an alternative method may be used.  Under th e Anti-dumping Agreement, however, the anti-
dumping practices of the exporting country are irrelevant to the dumping calculation.  Thus if
reason (iii) were applied, it could result  in use of WTO-inconsistent methodology.
Please clarify the intent of reason (iii) and how it would be applied in practice.
Answer:
See Answer 43 herein.
Question 47.  
Please explain how the requirements of the Articles 2.4 (e.g., sales compared be
contemporaneous), 2.4.1(currency conversion), and 2.4.2 (anti-dumping margins must be based
on a comparison of a weighted average normal value and weight average export price, or on a
transaction-by-transaction basis) of the Anti -dumping Agreement will be implemented in law.
Answer:
Requirements of Articles 2.4.1 and 2.4.2 of th e Agreement on Implementation of Article VI
of GATT 94 have been implemented in Article 8.5 of Federal Law No. 63-FZ and also in Appendix 2
to Resolution No. 274 of the Government of the Russian Federation dated 11 March 1999 “On the
Procedure for Investigation Prior to the Implementation of Special Protective Measures, AntidumpingMeasures or Compensatory Measures”. In addition, the information on the currency rate at the selling
date of the goods being the object of investigation will be requested from the foreign entity concerned.
Completion of a questionnaire will be requested.
Question 48.  
Article 10 of the Law describes how the term “substantial damage to the Russian economy”
should be applied in anti-dumping investigations.
Does this render the definition of the term “substantial damage to the Russian economy”
provided in art. 2 inapplicable to anti-dumping in vestigations?  If not, what is the relationship
between the two provisions?WT/ACC/RUS/38
Page 25
Answer:
The definition of “substantial damage to the Russian economy” set forth in Article 2 of
Federal Law No. 63-FZ deals with this notion in very general terms. For the definition specific to
antidumping investigations, see Article 10 of the Law.
Please also note that Resolution No. 183 of the Government of the Russian Federation “On
Specific Procedure for Determining Material Injury to a Sector of Russian Economy as a Result of
Dumped Imports” was taken on 16 February 1999 to implement Article 10 of the above Federal Law
and this Resolution gives further details of the notion in question.
- Injury issues
Question 49.  
Article 10 of the Law does not indicate what fact ors are to be examined in analysing the volume,
price effect, and impact of dumped imports.
Are the factors to be examined those specified in  Article 2 definition of “substantial damage?”
If so, how is this consistent with the requirements of Articles 3.2 and 3.4 of the Anti-dumping
Agreement?  If not, where are the factors spec ified and how are they consistent with the
requirements of Articles 3.2 and 3.4 of the Anti-dumping Agreement?
Answer:
The requirements of Articles 3.2 and 3.4 of the Agreement on Implementation of Article VI
of GATT 94 were addressed in Resolution No. 183 of the Government of the Russian Federation
dated 16 February 1999, a copy of which is attached.
See Answer 48 herein.
Question 50.  
The Law does not indicate what factors are to  be considered in a determination of whether
dumped imports “menaces to inflict substantial damage to a branch of the Russian economy.”
How does Russia intend to implement the requirements of Article 3.7 of the Anti-dumping
Agreement with respect to threat of material injury analysis?
Answer:
The requirements of Article 3.7 of the Agreement on Implementation of Article VI of GATT
94 were addressed in Sections 11 and 12 of Resolution No. 183 of the Government of the Russian
Federation dated 16 February 1999.
See Answer 48 herein.
Question 51.  
The definition of “branch of the Russian economy” in Article 2 of the Law suggests that the
domestic industry that may be analysed in anti -dumping investigations may account for as little
as 50 per cent of production of the domestic like product.WT/ACC/RUS/38
Page 26
How is this consistent with the requirement in Article 4.1 of the WTO Anti-dumping Agreement
that the “domestic industry “shall refer to the domestic producers as a whole of the like
products or to those of them whose collective output of the products constitutes a major
proportion of the total domestic production of those products?”
Answer:
The definition of “a branch of the Russian economy” given in Article 2 of Federal Law No.
63-FZ is entirely consistent with the requirements of Article 4.1 of the Agreement on Implementation
of Article VI of GATT 94, the only development being a more detailed wording in terms of quantity.
A similar qualification regarding “a major proportion (over 50 per cent) of the output of the
similar or immediately competing products” is used in antidumping legislation of other WTO
member-states, for instance the EC (Regulation Council on Protection against Dumped Imports from
countries not members of EC 384/96, Articles 4, 5).
Question 52.  
Article 9.3 of the Law indicates that, when a regional industry analysis is used, anti-dumping
duties may be imposed if the dumped imports are concentrated in the p ertinent region and “is
inflicting substantial damage to at least 80 per cent of the producers of the similar or
immediately competing good within the said market.”
How is this consistent with the requirement of Article 4.1(ii) of the Anti-dumping Agreement
stating that anti-dumping duties may be imposed in regional industry investigations only if,
inter alia , “dumped imports are causing injury to the producers of all or almost all of the
production within said market?”
Answer:
For the purposes of greater transparency and clarity of legal regulations, the descriptive
notion of “all or almost all of the production within said market” given in the Agreement on
Implementation of Article VI of GATT 94 was replaced with the quantitative expression of the same.
Such interpretation does not contravene the provisions of Article 4.1(ii) of the Agreement on
Implementation of Article VI of GATT 94 and is frequently used by other countries in writing ownlegislation (see Answer 51 herein).  We believe that this approach is legitimately derived from WTO
rules and disciplines.
Question 53.  
Article 20(4) of the Law appears to authorize a cumulative analysis when there are
simultaneous investigations of goods from severa l different foreign countries.  There appears to
be no requirement that the investigating auth ority determine that a cumulative assessment is
appropriate in light of the conditions of competition between the imported products and theconditions of competition between the imported products and the domestic like product.
In view of this, how is Article 20(4) consistent with Article 3.3 of the Anti-dumping Agreement?
Answer:
According to Section 9 of Resolution No. 183 of the Government of the Russian Federation
dated 16 February 1999, determination of substantial damage to a branch of the Russian economyshould proceed by reference to the conditions of competition between the imported products and the
conditions of competition between the imported and the domestic like product in any antidumpingWT/ACC/RUS/38
Page 27
investigation, including cumulative analysis of dumped imports from different countries. Thus the
provisions of Article 3.3 of the Agreement on Implementation of Article VI of GATT 94 have been
addressed in the Russian legislation.
- Procedural issues
Question 54.  
There appears to be no provision in the Law for notice and a written explanation of a decision
to impose provisional duties, as required by Article 12.2.1 of the Anti-dumping Agreement and
Article 22.4 of the Subsidies Agreement.
Please indicate how these requirements are satisf ied in other provisions of law in the Russian
Federation or how such provisions will be implemented.
Answer:
The requirements of Article 12.2.1 of the Agreement on Implementation of Article VI of
GATT 94 and Article 22.4 of the Agreement on Subsidies and Countervailing Measures are satisfied
in Section 17 of Resolution No. 274 of the Government of the Russian Federation dated
11 March 1999, wherein the procedure for notice of application of special safeguards, antidumping or
countervailing measures, including imposition of provisional antidumping and countervailing duties,
is defined.
Question 55.  
Article 11.2 of the Law provides that interim duties may be imposed for a period of up to 4
months, but the period may be extended to six months.  This provision does not appear
consistent with Article 7.4 of the Anti-dumping Agreement, which requires that a decision to
extend provisional measures to six months be based on a request by exporters representing asignificant percentage of the trade involved.  Similarly, Article 14.2 of the Law appears to
conflict with Article 17.4 of the Subsidies Agreement, which limits provisional measures to four
months.
Please clarify these apparent inconsistencies and indicate how these provisions of the WTO
Agreements will be reflected in Russian Law.
Answer:
The provision that a decision to extend provisional measures to six months should be based
on a request by exporters representing a significant percentage of trade involved will be incorporated
in the text of the Law. The same is true concerning the comment on Article 14.2.
Question 56.  
Article 11.6 of the Law provides that an investigation may be terminated upon receipt of a
voluntary commitment by the exporter to refrain from dumping or “to reduce the dumpingimportation of a commodity by an acceptable amount”.  This provision does not appear to
require an affirmative preliminary determination of dumping and injury before price
undertakings can be sought or accepted, as pr ovided for in Article 8.2 of the Anti-dumping
Agreement.  Furthermore, there appears to be no provision in the Law addressing the
conditions under which the investigation would be continued, as required by Article 8.4 of the
Anti-dumping Agreement.  (Similar apparent in consistencies exist with respect to Article 14.4.
of the Law)WT/ACC/RUS/38
Page 28
Please clarify these apparent inconsistencies and indicate how these provisions of the WTO
Agreements will be reflected in Russian Law.
Answer:
The requirements of Articles 8.2 and 8.4 of the Agreement on Implementation of Article VI
of GATT 94 regarding an affirmative preliminary de termination of dumping and injury before price
undertakings can be accepted and the opportunity to continue the antidumping investigation after
accepting price undertakings, are reflected in Paragraph 38 of Section V of Resolution No. 274 of the
Government of the Russian Federation dated 11 March 1999.
Question 57.  
Article 13 of the WTO Agreement on Subsidies and Countervailing Measures provides for
consultations after the filing of a application under Article 11.
Please indicate how the requirements of this provision are implemented in Russian law.
Answer:
In the course of the proposed revision, Federal Law No. 63-FZ will be supplemented to
provide for consultations after the filing of an application as required by Article 13 of the Agreement
on Subsidies and Countervailing Measures.
Question 58.  
Article 18.3 of the Law states that a petition supported by producers accounting for less than
25 per cent of total production cannot be accepted.  This industry support requirement does not
appear to be WTO-consistent, as Article 5.4 of the Anti-dumping Agreement and Article 11.4 of
the Subsidies Agreement also require that the producers supporting the petition account for
more than 50 per cent of the production produced by that portion of the industry expressing anopinion.
Please indicate how Russia plans to incorporat e the latter requirement in its legal provisions.
Answer:
Article 5.4 of the Agreement on Implementatio n of Article VI of GATT 94 and Article 11.4
of the Agreement on Subsidies and Countervailing Measures shall be considered to be made “by andon behalf of the domestic industry” if it is supported by those domestic producers whose collective
output constitutes more than 50 per cent of the total production of the like product produced by that
portion of the domestic industry expressing either support for or opposition to the application.
However, no investigation shall be initiated when domestic producers expressly supporting the
application account for less than 25 per cent of total production of the like product produced by the
domestic industry.”
According to Article 18.1 of the Law an investigation shall be initiated on having received an
application by or on behalf of a domestic industry which is defined in Article 2 of the Law as “the
producers of a like or directly competitive product in any sector of the Russian economy (including
those engaged in the processing of agricultural products) whose collective output of the product
constitutes a major proportion (more than fifty per cent) of the total domestic production of the
product.”WT/ACC/RUS/38
Page 29
Thus the Law is completely consistent with Article 5.4 of the Agreement on Implementation
of Article VI of GATT 94 and Article 11.4 of the Agreement on Subsidies and Countervailing
Measures.
Question 59.  
Article 18.5 of the Law states that the investigatin g authority shall notify the interested parties
of “an impending investigation within 30 calendar da ys of the date of adoption of a decision to
commence an investigation”.  It is not clear that  this provision is consistent with Article 6.1.3 of
the Anti-dumping Agreement and Article 12.1.3 of the Subsidies Agreement, which require that
exporters be notified “as soon as an  investigation has been initiated”.
Please explain how Russia plans to reconcile the provisions of the Law with the requirements of
the WTO Agreements in this regard.
Answer:
Article 6.1.3 of the Agreement on Implementati on of Article VI of GATT 94 and Article
12.1.3 of the Agreement on Subsidies and Countervailing Measures contain the provision according to
which as soon as an investigation has been initiated the interested parties shall be provided by the
authorities with relevant information in respect of  the investigation and the application, but not of
initiation of an investigation.
In this respect the specific obligation to provide the interested parties with the full non-
confidential text of the application for anti-dumping or countervailing measures will be incorporated
into the text of the law. The corresponding Draft Law will be submitted to the Duma.
See also Answer 42.
Question 60.  
Article 18.10 of the Law appears to accord to “persons concerned” the right to see
non-confidential information and to participate in meetings concerning the investigation.
However, the law does not contain other due process requirements of Articles 6 and 12 of the
Anti-dumping Agreement and Articles 12 and 22 of the Subsidies Agreement.
Specifically, (a) There is no provision accordin g interested parties the right to present any
evidence, orally or in writing, which they cons ider relevant to the investigation; (b) There is no
provision requiring that interested parties be informed before a final determination of essential
facts under consideration in sufficient time to enable them to defend their interests; (c) There is
no provision for the investigating authority to provide any explanation of a final decision to
impose anti-dumping or compensatory measures ; and (d) There are no standards for according
information confidential treatment and no requirement for public summaries of such
information.
Please explain how Russia will implement the above requirements in its legal provisions.WT/ACC/RUS/38
Page 30
Answer:
Requirements of Articles 6 and 12 of the Agreement on Implementation of Article VI of
GATT 94 and Articles 12 and 22 of the Agreement on Subsidies and Countervailing Measures are
addressed in Sector IV of Resolution No. 274 of the Government of the Russian Federation dated
11 March 1999, including the possibility to take into account information in oral form if it has beenconfirmed in writing in Russian in the course of information.
See also Answer 42.
3. Internal Policies Affecting Foreign Trade in Goods
(a) Industrial policy, including subsidy policies
- Compensatory issues
Question 61.  
Under the definition in Article 2 of the Law, full or partial exemption from taxes and other
payments  “in amounts not exceeding the amounts of fees or taxes paid” is a subsidy.  This
seems to be an incorrect adaptation of footnote 1 to Article 1.1 of the Subsidies Agreement.
Footnote 1 states that the exemption of exports from duties or taxes borne by products sold for
domestic consumption, or the remission of such duties or taxes “in amounts not in excess of
those which have accrued” is not a subsidy.  Is this a drafting or translation error?
Answer:
When giving the definition of a subsidy, the lawmakers meant exemption from direct taxes
(land tax, transport tax, road tax and so on) and non-customs duties and levies. The actual wording,
however, is somewhat inaccurate, and the tran slation served to compound the inaccuracy. Your
comment will be taken into consideration when Federal Law No. 63 is revised.
Question 62.  
Please describe any other industrial subsidies provided by the federal government which may
not be reflected in the federal budget, such as: preferential pricing of goods or services (e.g.,
electricity, gas, oil, industrial raw materials, transportation services), import duty exemptions
or deferments, tax benefits (e.g., tax holidays, forgiveness of taxes due), government loanguarantees, forgiveness of debt and preferential access to credit or exp licitly confirm that such
potential industrial subsidies have either been reported or do not exist.
Answer:
Under Part I of the Tax Code (Chapter 9 “Cha nge of Time Limit for Payment of Taxes and
Levies”) the authorities that have the power to decide to change the time limits for payment of a tax
can also provide tax holidays and deferrals of levy payments based on the following circumstances:
- damage inflicted by a natural calamity, technology breakdown or other force major
circumstances;
- delayed financing from the budget or delayed payment for a completed state order;
- likelihood of bankruptcy in the event of full tax payment in a single instalment;
- a natural person cannot afford to pay the tax in full in a single instalment;
- the production is of seasonal nature;WT/ACC/RUS/38
Page 31
- customs legislation of the Russian Federation provides for such holidays in respect of
cross-border taxes; and
- as a tax and investment tax credit;
- A draft Procedure has been prepared for organizing the process of granting, by the
Ministry of Finance, of postponements or de ferral of tax credits, and investment tax
credits in respect of payment of federal taxes and levies. This is to be provided in the
federal budget that is currently at the stage of signature. After the confirmation of the
above Procedure, postponements and deferrals will be granted on such grounds and
on such terms as are provided by Part I of the Tax Code of the Russian Federation
and the Procedure itself.
Article 55 of Federal Law No. 36-FZ “On the Federal Budget for 1999” provides for
repayable and interest-bearing financing of expenses of seasonal procurement of raw and othermaterials for the production of consumer goods a nd goods of industrial designation manufactured by
light and textile industries in the amount of up to 700 million Rubles. Such financing is to be effected
with funds returning as repayment of budget loans is sued earlier to enterprises in the light and textile
industries and payment of charges for use of such loans; a supplement of up to 1,800 billion Rubles is
also available from the federal budget out of which 700 million Rubles are allocated to the creation ofreserves of timber, raw materials and fuel to provide for timber industry enterprises in the off-season,
and 1,100 million Rubles are designated for seasonal procurement of raw and other materials for
manufacture of consumer goods by the light and textile industries.
As of now, a resolution of the Government of the Russian Federation “On the Procedure and
Time Limit for Carrying out the Restructuring of Creditor Indebtedness of Legal Entities to the
Federal Budget and State Non-Budget Funds” has been drafted to implement Article 115 of the
Federal Law “On the Federal Budget for 1999” and Resolution No. 327 of the Government of the
Russian Federation dated 22 March 1999.
Under the legislation currently in effect, the Government of the Russian Federation provides
state guarantees to secure the implementation of investment projects.
A zero excise rate for natural gas supplied to vegetable producing green houses within the
established limits for gas consumption was fixed by Resolution No. 23 of the Government of the
Russian Federation “On First-Priority Measures to Enhance the Effectiveness of Green Houses in
1999” dated 7 January 1999.
Under Article 2b of Federal Law No. 42-FZ “O n the Federal Budget for 1998” and of the
Government of the Russian Federation Resolutions No. 1208-r dated 2 August 1998, and No. 1421-r
dated 3 October 1998, joint-stock companies dealing with energy and power supply and located in theFar East region were granted governmental support in the form of compensatory payment of charges
for power.
As for the granting of a grace period in respect of the payment of customs duties, the customs
authorities are authorized, by virtue of Article 61, Article 63.1.3 and Article 64.11 of the Tax Code of
the Russian Federation, to change the time limits for payment of customs duties using the postponedor deferred payment mode, in keeping with the proc edures set forth in the customs legislation of the
Russian Federation.
Question 63.  
Please confirm that loan guarantees are no long er provided by the Department of International
Financial Organizations and Financial Credits.WT/ACC/RUS/38
Page 32
Answer:
The International Financial Organizations Department and the Department of Administration
of the National Foreign Debt under the Ministry of Finance of the Russian Federation do not provide
any loan guarantees.
Question 64.  
Based on news reports (see the Interfax Business Report for 16 -23 June 1998), the government
has guaranteed 40 per cent of the borrowing of aircraft manufacturers.  Are these loan
guarantees included in WT/ACC/RUS26?  If so, please indicate where.  If not, please provide
information on the terms of the guarantees provided.
Answer:
The document you are referring to does not contain any such information as it only covers the
developments that occurred in 1997. This year we will submit the 1998 information where the issue ofthe loan guarantees will be addressed.
Question 65.  
Resolution No. 716 “On Additional Measures For State Support of Russian Civil Aviation”
requires Russian airlines to commit to purchasin g/leasing Russian-made aircraft equivalent to
three times the amount of the customs duties to be waived in order to receive duty reductions
and exemptions for the purchase/lease of foreign-manufactured aircraft and to concluding an
investment agreement with the Ministry of Economics.
We believe it is inconsistent with the following WTO obligations:
- the Agreement on Trade in Civil Aircraft;
- the national treatment provisions of Article III of the GATT;
- the Agreement on Trade-Related Aspects of Investment Measures;
- the Agreement on Subsidies and Countervailing Measures.
Answer:
In the United States- Russia Joint Memorandum of Understanding signed by the Chairman of
the Government of the Russian Federation Victor Chernomyrdin and the US Vice President AlbertGore in Washington on 30 January 1996, the Russian Federation confirmed its intention to provide
wider access to the Russian market as the reforms progress, including to the civil aviation sector. The
above document has the status of a memorandum of understanding which is intended to govern future
work by the Government of the Russian Federation. Resolution No. 716 of the Government of the
Russian Federation “On Additional Measures of St ate Support of Civil Aviation” of 7 July 1998, is
binding on all federal executive authorities.
After accession to the WTO, the Russian Federation will, within a reasonable time period,
consider acceding to the Agreement on Trade in Ci vil Aircraft, on terms satisfactory to both the
Russian Federation and the other parties.
The memorandum states that throughout the transition period until the completion of the
programme for restructuring the Russian aviation industry and its complete integration with the
international trade system, the Russian Federation plans to phase down the tariffs for aeroplanes andtake the requisite steps to ensure fair and reasonable access of non-Russian aeroplanes to the Russian
market (there is no mention of unconditional customs duties waivers as Question 81 suggested).WT/ACC/RUS/38
Page 33
Considering that (1) demand for aircraft in the Russian Federation is very low, (2) Russian
airlines are experiencing an increasing shortage of new aircraft and an acute need for replacement of
obsolete stock, and also that (3) in the very near future very significant sales and/or financial leases of
Russian- and foreign-made aircraft are expected, the Russian Federation is working to create an
adequate non-differentiated tariff exemption system to enable Russian airlines to undertake thenecessary financial leasing and purchase of foreign-made aircraft.
In order to enhance the competitiveness, to modernise the air fleet and develop a more
prominent presence for Russian airlines on the international civil aviation market, Resolution No. 716
of the Government of the Russian Federation “On Additional Measures of State Support of Russian
Civil Aviation” dated 7 July 1998, laid down a uniform procedure for consideration and granting of
customs duty waivers to aircraft temporarily imported under Articles 68 and 72 of the Customs Code
of the Russian Federation, provided that the following conditions are met:
- no certified domestic counterparts of the aircraft to be imported exist at the moment
of signing of the financial lease;
- contracts for purchase or financial lease of aircraft are made by an airline with a
domestic Russian aircraft producer for a value which is up to 3 times the amount of
the customs duties to be waived; and
- an investment agreement is made between the Ministry of Economics of the Russian
Federation and the Russian airline concerned.
Waivers of customs duties for imports of aircraft will be accorded by a special resolution of
the Government of the Russian Federation based on an actual fixed-term investment agreement to be
made between the Russian Federation Ministry of Economics and a Russian airline.
For example, pursuant to Resolution No. 716 and Instruction No. 913-r dated 7 July 1998, of
the Government of the Russian Federation, the Ministry of Economics of the Russian Federation and
Open Joint-Stock Company «Aeroflot – Russian International Airlines» signed an investment
agreement dated 15 July 1998, on the exemption of OJSC «Aeroflot – Russian International Airlines»
from customs payments for 16 aeroplanes of B-737, B-777 and A-310 models to the amount of US$357.7 million. In order to attract US$ 813 million in foreign investments in 1998 – 1999 to fund the
renovation of its air fleet, OJSC “Aeroflot – Russian International Airlines» will purchase a
US$ 1.075 billion worth of aircraft from domestic producers in 1998 – 2005 for the purposes of civil
aircraft development (purchase of 13 Il-96 M/T planes).
As of now, customs duty waivers have been granted to OJSC «Aeroflot – Russian
International Airlines» in the amount of US$ 301.17, but no purchase of Il-96 M/T planes as required
by the above Resolution of the Government of the Russian Federation has yet been made by OJSC«Aeroflot – Russian International Airlines».
To the extent that financial leases rather than purchase of aircraft are concerned, Resolution
No. 716 does not contravene the TRIMs Agreement because it regulates financial leasing of aircraft
(i.e. it deals with a financial service), whereas the TRIMs Agreement applies to investment measures
related to trade in goods only.
It does not contravene the Agreement on Subsidies and Countervailing Measures because the
waivers granted are not intended to hinder imports or encourage exports (on the contrary, they are
intended to provide incentives for imports), and is further counterbalanced through the creation of
additional costs for financial leasing of domestically produced aircraft.
The above Resolution does not conflict with the national treatment provision of Article III of
the GATT which states that the products of the territory of any contracting party imported into the
territory of any other contracting party shall be  accorded treatment no less favourable than thatWT/ACC/RUS/38
Page 34
accorded to like products of national origin. This is exactly the purport of the Resolution, which
provides for reduction of customs payments on temporary imports of aircraft to the Russian territory
in order to ensure equality of treatment when in  the Russian territory for domestically produced and
imported aircraft.
Question 66.  
Resolution No. 716 “On Additional Measures For State Support of Russian Civil Aviation” also
conflicts with the 1996 United States-Russi a Joint Memorandum of Understanding (MOU) on
Aircraft Market Access which provides for un conditional tariff waivers on imports of
non-Russian aircraft.
What is the status of the resolution?  Ha s it been implemented?  Have any domestic
sales/imports taken place under its provisions?
Answer:
See Answer 65 herein.
Question 67.  
Please describe and indicate the status of new legislation to reduce tariffs on imported aircraft
and to exempt some imports from the limitations contained in the resolution.
Answer:
Import customs duties for certain types of civil aircraft were reduced by the Government of
the Russian Federation Resolution No. 215 “On the Partial Amendment of the Customs Tariff of the
Russian Federation, Approved by the Decision of the Government of the Russian Federation No. 1560
of 27 December 1996” dated 24 February 1999, and Resolution No. 444 “On Partial Change of the
Customs Tariff of the Russian Federation, Approved  by the Decision of the Government of the
Russian Federation No. 1560 of 27 December 1996” dated 16 April 1999.
The Resolution of the Government of the Russian Federation No. 716 dated 7 June 1998 does
not impose any limitations on importation of foreign-ma de aircraft to Russia. The latter Resolution
deals with financial leasing of civil aircraft rather than with imports, and is not restrictive but rather
focuses on a preferential procedure for such financial leasing.
Question 68.  
We now understand that Decree No. 1204 (Nov ember 1995) has been superseded by a
subsequent decree which terminates all benefits under Decree No. 1204.  Please confirm our
understanding and provide the subsequent decree (unless previously provided).  Has Resolution
No. 53 (January 1996) been superseded in a similar manner?  If so, please provide a copy of the
relevant legal document (unless previously provided).
Answer:
Decree No. 1204 of the President of the Russia n Federation “On Urgent Measures to Support
the Exporters” dated 30 November 1995 remains in effect.
Resolution No. 53 of the Government of the Russian Federation “On Supplementary Support
for National Exports of Goods and Services” dated 20 January 1996 also remains in force.WT/ACC/RUS/38
Page 35
Question 69.  
Please explain the nature of the “Federal Pr ogramme for Export Development” (Resolution
No. 123) and the type of benefits being provided under the programme.
Answer:
The Federal Programme for Export Development does not provide any benefits in the form of
export subsidies for Russian exporters. The proposed measures of national export development to be
funded from the federal budget are intended to be consistent with the regulations and requirements of
the WTO which define the procedure for providing st ate support for exports. As an example under the
Programme, a system for provision of state guarantees and insurance of export credits against
commercial (banking) and political risks to protect exporters as well as a federal budget financed
system of foreign economic information are currently being elaborated.
Question 70.  
The “Federal Programme for Export Development” (Resolution No. 123) appears to encourage
export production through the State investment programme.  Specifically, projects which are
designed to produce goods for export are potentially eligible for State support up to 40 per cent
of the value of the project.  Please explain th e degree to which potential export production is
taken into account when awarding financing under the State investment programme.
Answer:
The Federal Programme for Export Development defines the main thrusts of the national
export development strategy and has been approved by the Government of the Russian Federation as a
general plan without any binding effect.
The recommendations of the Federal Programme for increasing the production of export
goods, which contemplated state support of up to 40 per cent of the value of the project, were made
for 1996 alone. The support so granted would be accessible, interest-bearing and repayable.
Question 71.  
Where in Appendix 6 of WT/ACC/RUS/22/Add.1/Rev.1 are the amounts listed in Appendix 2 of
WT/ACC/RUS/22 for “Transfers”, “Subventions”, “Closed Administrative Areas” and “ArcticDeliveries”?
Answer:
During the 8th Working Party meeting that was held from 28 to 31 July 1998, the Russian
party submitted for consideration of the WTO member-states an updated document on industrial
subsidies (WT/ACC/RUS/26) which replaced do cument WT/ACC/RUS/22. The updated version
incorporated revised data concerning industrial subsidies in the Russian Federation. These data were
compiled on the basis of funds allocated in fact from the federal budget (as opposed to estimatedbudget expenses for 1997 contained in document WT/ACC/RUS/22). All the information on regional
support is listed in Table 3 in the updated document.
Question 72.  
It appears that the following request under Question 31 of WT/ACC/RUS30 was not addressed:
Please describe the role of the Anti-Monopoly Committee in the provision of industrialsubsidies.WT/ACC/RUS/38
Page 36
Answer:
Article 7.1 of Law No. 948-1 of the Russian Federation “On Competition and Limitation of
Monopolistic Activity on the Commodity Markets” dated 22 March 1991 (as amended on
6 April 1998) (submitted to the WTO Secretariat) provides that benefits granted by federal executive
authorities, regional executive authorities of the Russian Federation and local governments to one or
more commercial entities must be approved by a federal antimonopoly authority, unless otherwise
provided for by the statutory acts of the Russian Federation. An independent office for antimonopoly
control over executive authorities was established within the central structure of the Ministry of the
Russian Federation for Antimonopoly Policy and Support for Business Undertakings.
Question 73.  
What is the role, if any, of the Government Co mmission for Financial and Monetary Policies in
the allocation of government and commercial credit to industrial sectors or enterprises?
Answer:
The Regulations on the Government Commission for Financial and Monetary Policies were
approved by Resolution No. 935 of the Governme nt of the Russian Federation dated 12 August 1998.
Pursuant to Section 1(p) of the Regulations, the purpose of the Government Commission for
Financial and Monetary Policies is to consider proposals and decide whether guarantees provided byRussian commercial banks, or warranties provided by state authorities of the Russian Federation
regions or third parties as the case may be, are acceptable as security for obligations of organizations
to repay the loans financed with foreign borrowings of the Russian Federation, such loans having
been extended to fund the procurement of imported equipment and other goods and services to
implement investment projects in the Russian Federation.
Credit granting to industrial sectors or enterprises is outside the scope of the Government
Commission for Financial and Monetary Policies.
Question 74.  
Re. "Government structural and production policies (which) shall be implemented mostly
through development programmes" (Statement on measures approved on 31 October 1998).
We would appreciate a full list of the products and services which will benefit from such
development programmes, including details of the measures that will apply.
Answer:
The Federal Law “On the Federal Budget for 1999” and the Plan of Action of the
Government of the Russian Federation regarding the implementation of the document “On Measures
by the Government of the Russian Federation and the Central Bank of the Russian Federation to
Stabilize the National Socio-Economic Conditions” envisage the creation of a Russian Bank forDevelopment which is proposed to be the investment agent of the Government of the Russian
Federation, including in respect of the development budget. The activities of the Russian Bank for
Development mainly concern the provision of credits for specific sectors of the Russian economy.
The above Plan also envisages the creation of a Russian state agency to insure and secure the
risks involved in the provision of credits and investments.WT/ACC/RUS/38
Page 37
Question 75.  
Postponement of "the repayment of target-specific budget loans that were granted in 1997 to
enterprises of the fuel and energy sector" (Statement on measures approved on
31 October 1998).
We would appreciate details of the enterprises in volved, of the magnitude of the loans which are
affected by this measure, of the targets that ha d to be met in order that the loans be made, and
of how the terms of repayment have been changed.
Answer:
The answer to this question can be found in Resolution No. 396 of the Government of the
Russian Federation “On Exemption of Enterprises and Organizations of the Fuel and Energy Complex
from the Payment of Fines (Penalties) in Respect of Use of Budget Loans Received for the Purposes
of Preparation for the Autumn-Winter of 1996-1997” dated 9 April 1999, adopted as a developmenton the Joint Statement the Question refers to. Under the above Resolution, enterprises and
organizations of fuel and energy complex, includin g nuclear power plants, are exempted from the
payment of fines (penalties) for delayed repayment of budget loans issued in 1996-1997 from the
Federal Fund for financial support for the seasonal fuel procurement on condition of repayment before
25 December 1999.
The loans were issued by the Ministry of Finance of Russia based on the distribution list
supplied by the Ministry of Fuel and Energy of Russia to enterprises of  Northern regions
experiencing problems.
Question 76.  
Re. "Allocation of funds to the administrations of  the subjects of the Russian Federation in the
far eastern region to fully compensate electric ity tariffs" (Statement on measures approved on
31 October 1998).
Which organizations are providing the electricit y, in relation to the payments for which full
compensation is being made?
Are these allocations for the electricity purchases  of sub-federal administrations, or for the
purchases of other entities as well?  Please provide details.
Answer:
To stabilize the socio-economic conditions of the regions of Far East and Arkhangelsk oblast,
purpose-specific allocations are made from the federal budget to administrations of Primorsky and
Khabarovsk krais, Amursk, Kamchatka, Magadan, Sakhalin oblasts, and the Chukotsky and
Koryakian autonomous districts to compensate elec tric power charges to joint-stock companies within
these territories for energy and power supply (AO-energo), including:
- “Dalenergo” – Primorsky krai;
- “Khabarovskenergo” – Khabarovsk krai;
- “Amurenergo” – Amursk oblast;
- “Sakhalinenergo” – Sakhalin oblast;
- “Magadanenergo” – Magadan oblast;
- “Kamchatskenergo” – Kamchatka oblast, Koryakian autonomous district;
- “Chukotenergo” – Chukotsky autonomous district;
- “Arkhenergo” – Arkhangelsk oblast.WT/ACC/RUS/38
Page 38
The words “to fully compensate” mean that the compensation will be provided without delay,
however the tariffs will be compensated only partially (the difference between the cost of production
of electric power and the selling price for the end-user.
Specific purpose allocations from the federal budget are made to regions of the Far East and
Arkhangelsk oblast and the administrations of regions receiving such assistance distribute suchallocations to the territorial AO-energos for compensation of losses.
(b) Technical regulations and standards, including measures taken at the border with
respect to imports
Under this heading, we thank Russia for the detailed information on measures for the
notification and publication of standards.  Last summer we pointed out that, under the TBT
Agreement, normative documents relating to standardization should be published at the draft
stage so as to enable Members wishing to do so to submit comments within a 60-day period.
Question 77.  
Concerning the response to question 3 in WT/ACC/RUS/30, Russia addresses the issue of
geographic and climatic conditions that would require them to deviate from international
standards.  In particular, Russia points to differ ing regional cuisine and traditions as a basis for
stricter requirements for food products.
We would submit that this is not the intent  of Article 2.4 of the TBT Agreement, and that
maintaining more stringent requirements for certain foodstuffs just because they are
traditionally consumed in greater quantities in specific regions (e.g., higher potato consumption
in European Russia) is not consistent with the TBT Agreement.
Answer:
The Russian party does not entirely share the view that more stringent national standards with
regard to certain types of foodstuffs are inconsistent with Article 2.4 of the Agreement on Technical
Barriers to Trade (“TBT Agreement”)
 Our earlier reference to potato consumption is not only meant to demonstrate the popularity
of this product in European Russia resulting in hi gher consumption of this product than in any other
region around the world.
What was intended in fact was that a dose of harmful substances consumed thereby increases
dramatically and can reach levels that could endanger human health.
Let us illustrate this using hypothetical figures:
Standard Permissible amount of
harmful substances, in
agreed unitsThe amount of
consumption in 24 hours,
average figure in kgActual amount of
consumption of harmful
substances in 24 hours,
agreed units
International 200 .2 200 x .2 = 40
National 100 .8 100 x .8 = 80
The above example shows that even if we assume a permissible amount of half the
international standard, the resultant consumption of  harmful substances by Russians amounts to twice
the international permissible amount.WT/ACC/RUS/38
Page 39
Nevertheless, the Russian State Standard Committee proposes to bring national levels up to
75 per cent of international standards for processed and raw food products.
However, national standards will be maintained for the following group of commodities that
have no foreign counterparts:
- Bread and various types of baked product (mixed and rye);
- Tinned fish (sprats);
- Balyk, i.e. cured fillets of fish produced in internal waters (inconnu, nelma, shallow-
water cisco), salmon and cisco (white fish) species;
- Caviar (sturgeon and salmon).
We would like to point out here that the problem this question addresses is not relevant to the
TBT Agreement, but is directly connected with the WTO Agreement on the Application of Sanitary
and Phytosanitary Measures (SPS) (Articles 2, 3 and others) and is [entirely] consistent with its
requirements.
The establishment of maximum permissible levels (“MPL”) of harmful substances, including
residual amounts of pesticides, in finished and raw food products is fixed by the Federal Law of the
Russian Federation “On Sanitary and Epidemiological Public Safety” which is aimed at better
protection of public health.
MPLs are set first and foremost by reference to the permissible daily intake (“PDI”) for
consumption of harmful substances by human organisms from the environment and foodstuffs, in
amounts fixed that are also based upon amounts agreed to internationally (WHO, FAO, МTO etc.).
An MPL is established based on the results of Russian research, available foreign information and
information on properly balanced nutrition.
The established indices of MPLs are in effect for both domestic and imported products.
See also Answer 80 herein.
Question 78.  
According to the information received in July, the Law on Technical Barriers to Trade was to
be adopted during the third quarter of 1998.  What are the present prospects?  What is thedefinitive date envisaged?
Answer:
The draft Federal law “On Technical Measures in Trade” is currently under discussion and
negotiation with the relevant federal executive bodies. Considering the number of such bodies (25)
and therefore the very significant number of suggestions regarding particular clauses and paragraphs
of the draft, the final stage of this consultative process have turned out to be rather time-consuming.
Question 79.  
Why does Russia mention that the new law will contain specific provisions concerning
subordination between technical regulations adop ted federally and those of Russian Federation
subjects?  What exactly is meant by Russian Federation subjects?  How is this statement
consistent with the remarks on page 5 (WT/ACC/RUS/30) concerning Article 76 of the
Constitution (no conflict between federal laws and regional standards)?WT/ACC/RUS/38
Page 40
Answer:
The notion of “Russian Federation subject” is defined by the provisions of Article 1.1 and
Article 5 of the Constitution of the Russian Federation. The list of Russian Federation subjects is
provided in Article 65 of the Constitution of the Russian Federation. In essence, “subjects of the
Russian Federation” refers to regional governments in Russia.
“Subordination” is not the correct term to refer to the status of technical regulations of
Russian Federation subjects as opposed to technical regulations adopted at the federal level, although
this issue may be attributable to the translation.
The draft Federal law “On Technical Measures in (Barriers to) Trade” contains provisions to
the effect that technical regulations may be adopted regionally, by a Russian Federation subject,
provided always that the population residing in such territory of the Russian Federation or the
environmental conditions of such area are not thereby endangered.
Russian Federation subjects which have adopted such technical regulations must comply with
all the notification procedures provided for by Ar ticle 3 of the TBT Agreement through the Russian
TBT/SPS enquiry point, as is done in other countries.
Question 80.  
The lack of conformity between national and international standards is largely linked with
specific geographical and climatic conditions.  We thank Russia for having specified the product
sectors concerned by these differences in standa rds.  Nevertheless, we should like further
information on point(b) (page 7, WT/ACC/RUS/30)) which does not seem to correspond to the
interpretation given to paragraph 2.4 of the TBT Agreement but rather to be a matter of
regional particularities connected with the custom s of the population (rather than climatic and
geographical conditions).
Answer:
See answer 77 herein.
“Regional particularities” referred to in the question are really rooted in, and more often than
not fully conditioned by, climatic and geographical conditions. For example, a potato-dominated diet(or dependence on fish in Northern Russia) has resulted from potatoes having been a highly
sustainable guaranteed product in an unfavourable climate over decades. Similarly, the production of
fish has also yielded a guaranteed amount of this basic product.
For another example, the following should be considered.  There is an effective GOST 15150
standard in the Russian Federation “On Cars, Machinery and Other Technical Devices; Models for
Different Climatic Areas; Categories, Rules of Operation, Storage and Transportation in respect of
Environmental Climatic Factors”. GOST P 50992-96 “On Resistance of Automobile Transport toLow Temperatures in Natural Conditions; General Performance Specifications; Mapping Out
Climatic Areas” was made in furtherance of the above state standard and contains requirements in
respect of automobile starter motor function, installation of additional auxiliary equipment (heaters),
devices regulating and maintaining the optimum engine temperature, etc.
Normally the specifications enclosed with machinery imported in the Russian Federation
from abroad do not provide any instructions for the use of machinery at temperatures approximating –
60 C. In most cases the target operating temperature does not drop below – 30 C. Thus, for instance,
the specifications of American Petroleum Institute – AP1 7 standard for “Drilling equipment” refer toWT/ACC/RUS/38
Page 41
working temperature down to – 20 C, which is much warmer than the prevailing working temperature
for Siberia and the Far North.
The “regional particularities” are therefore dictated by climatic and regional conditions.
Question 81.  
Could we have more details on the significance of Russia's participation in international
certification and accreditation systems and MRAs in connection with equivalence of foreign
conformity assessment results?  What are the pr actical and legal criteria applied by Russia to
recognise foreign certificates?  What are the systems to which Russia refers?
Answer:
Russia’s participation in international certification systems is intended to facilitate promotion
of Russian-made products in foreign markets and to ensure equal treatment for each of the countries
joining the international certification system.
Pursuant to the Federal Law No. 5151-1 “On Certification of Products and Services” dated
10 June 1993, (Art. 9 “Authority of State administ rative powers”), the principles for Russia’s
participation in international certification and accreditation systems are determined by the State
Standard Committee of Russia in its capacity as the national certification authority, which includes,
inter alia , “laying down rules of recognition of foreign certificates, conformity marks and assessment
results”.
The Russian Federation participates in seven international systems of certification:
- The system of International Electrotechnical Commission (IEC) for electric
equipment testing with a view to assessing conformity to safety standards
- The system of certification of electronic machinery IEC
- The system of certification of motorcars, utility vehicles, buses and other means of
transport (ECE UN)
- The system of certification of handguns and cartridges
- The international system of certification of meteorological equipment and devices
- Agreement on Mutual Recognition of Test Data of Imported Aircraft and
Certification of Particular Parts of Aircraft
- The UN International Maritime Organization (Convention for safe navigation)
Recognition of certification results is performed in accordance with the rules of the above
international certification systems.
Mutual recognition of certification results is also contemplated by special agreements. There
exist bilateral agreements with 14 countries provid ing for mutual recognition of the test results of
mutually imported products.
Bilateral Agreements typically determine the ru les for recognizing test data for purposes of
certification of imported goods. This process is facilitated by the mutual accreditation of laboratories
performing such tests confirming their technical competence.
For purposes of certification the Russian certification authorities recognize test data issued by
accredited testing laboratories.
Russia’s participation in international systems of certification and accreditation is essential.
For example, in the process of sanitary assessment of products for certification by the state sanitaryWT/ACC/RUS/38
Page 42
epidemiological service agencies of the Russian Federation, the results of conformity assessment
carried out abroad are recognized and taken into account.  An essential factor here is the availability
of documents issued by officially authorized agencies of the exporting country confirming conformity
of the product to international safety and quality standards.
Question 82.  
When is the TBT Information Centre information scheduled to be translated into English?
Answer:
Article 10.5 of the TBT Agreement stipulates that developed member-states must provide
translation into English, French and Spanish languages of documents relating to notices required
under the TBT Agreement, or a summary of such documents where size is a factor, upon request of
other member-states.
Since Russia is not currently a WTO member, it does not submit any notices or receive
requests relating thereto from WTO Members.
As for the translation of other documents, Article 10.8 of the TBT Agreement states that
nothing in this Agreement (except as otherwise provided for in Article 10.5) shall be construed as a
requirement to issue or provide detailed information or copy of drafts in a language other than in a
language of the WTO member-state concerned.
Complete translation into English of information currently being prepared by the TBT/SPS
enquiry point will be initiated after Russia’s accession to WTO.  However, certain materials relating
to TBT/SPS issues are currently available in English.
(d) Trade-Related Investment Measures (TRIMS)
Question 83.  
Draft Amendments to 1991 Foreign Investment Law.   We understand that President Yeltsin
has vetoed this law, but that the State Duma is revising the law and plans to put it to a vote.
Please update us on the status of this draft law and the main differences between the current
draft and the earlier version which may be significant from the WTO perspective.
Does the revised draft of the amendments to the 1991 Foreign Investment Law still contain
“import-substituting” and “export-oriented” criteria in the definition of priority investment
projects?  If so, these criteria are not consistent with the WTO Agreement on Subsidies, and
may also be inconsistent with TRIMS.  We encourage you to change this language.
Please clarify the draft law’s tax and tariff concessions.
Answer:
On 9 July 1999, the Russian President signed Federal Law No. 160-FZ of the Russian
Federation “On Foreign Investments in the Russian Federation” (hereinafter “the Law”). The Lawtook effect on 14 July 1999.
The Law invalidates the RSFSR Law “On Foreign Investments in the RSFSR” dated
4 July 1991.WT/ACC/RUS/38
Page 43
Guarantees Against Unfavourable Development of the Russian Legislation
The Law (Article 9) pioneers the establishment of a guarantee to protect foreign investors and
businesses with foreign investments against any development in the Russian legislation which may be
unfavourable for such investors or businesses (her einafter “the Grandfather Clause”). Thus, for
instance, the Law provides that should any new legislation result in unfavourable changes in tax orduty rates, or aggravate the total tax commitment of a foreign investor for the purposes of
implementation of a priority investment project, or introduce a restraining and restrictive treatment of
foreign investments, the application of such changes will be suspended for the payback period of the
investment project, but in any event not longer th an 7 years from the commencement date of foreign
investment in such project (in certain exceptional cases the Government may grant an extension of
such term). The procedure for determining a payback period is to be defined by the Government of
the Russian Federation.
A priority investment project is defined as an investment project in which the total volume of
foreign investment amounts to no less than 1 billion Rubles (no less than the equivalent of such
amount in foreign currency at the rate quoted at the effective date of the Law), or an investment
project where the foreign investor’s share in the authorised capital amounts to a minimum of 100
million Rubles (no less than the equivalent amount in  foreign currency at the rate quoted at the
effective date of the Law), included in the list approved by the Government of the Russian Federation.
The minimum foreign investor’s share in the authorised capital of a commercial company
with foreign investments to trigger the Grandfather Clause is 25 per cent.
The Grandfather Clause is inapplicable in exceptional cases provided by the legislation for
such reasons as constitutional protection of society, preservation of defence preparedness andsovereignty of the state, morality and health of the people and the rights and lawful interests of third
parties.
It must be noted that for the Grandfather Clause to be applicable in practice, changes will
have to be made to tax and customs legislation.
Export Licenses and Sale of Foreign Currency
Under the old law on foreign investments, co mpanies owned (by no less than 30 per cent of
the authorised capital) by foreign investors were granted the right to export their own production
without an export licence. They were also exempted from the obligation to sell, in Russia, their
currency proceeds from the export of goods, works, services and intellectual creations (though it must
be admitted that in actual practice the authorities rarely effectively granted the above privileges).
The new Law does not envisage any such privileges.
Contributions to Authorised Capital
Under the old law on foreign investment, any property imported by the foreign investor as a
contribution to the authorised capital of a company with foreign investments was exempt from import
duties and taxes. The Law provides customs preferences exclusively in respect of implementation of
investment projects (without specifying what t hose preferences are). However, the same exemption
from import duties and taxes is contemplated by other federal laws currently in effect (e.g. the Law onValue Added Tax, the Law on Customs Tariff). Thus, the above privilege will be available until
corresponding changes are made to other laws.WT/ACC/RUS/38
Page 44
Other Provisions of the Law
Among other important provisions of the Law that have impact on foreign trade are the
following:
- national treatment is granted to foreign investors and commercial entities with foreign
capital, i.e. a legal status not less favourable than that available to domestic investors;
- exceptions are permitted from the national treatment, both to the improvement of the
investment environment and to its disadvantage;
- certain guarantees for foreign investors are enhanced, such as unrestricted use of
proceeds of an investment, exports of such proceeds, compensation of damage in the
event of confiscation, requisition, illegal actions by government officials, etc.;
- companies with foreign capital are authorised to perform all types of activities except
those directly prohibited by federal laws (e.g. prohibitions and restrictions orinvestments aimed at protection of the constitutional society, public morality and
health, historical and cultural values, natural resources and environment, rights and
lawful interests of third parties, defence preparedness of the country and sovereignty
of the state);
- in keeping with the international treaties to which the Russian Federation is a party
and federal laws the law authorised any disputes with foreign investors and
commercial companies using foreign investments to be taken to a court or an
arbitration court in the Russian Federation, or resort to international arbitration, if so
agreed by the parties;
- equivalency of registration requirements for commercial companies using foreign
investments as compared with Russian companies is also provided.
Question 84.  
The 1991 Russian Law on Foreign Investment spec ifically stated that international treaties
would take precedence over the Law.  This la nguage is not include in the new draft law.
If the law were to conflict with a multilateral or  bilateral agreement which Russia signs, which
would supersede?
Does the revised draft law envision creating  a new government entity to oversee investment
policy?
Answer:
Pursuant to the Constitution of Russia (Article 15) and the Law on International Treaties,
international treaties will prevail over a conflicting rule in a federal law in the even of conflict. It is
not essential therefore whether or not the Law provides for the precedence of international treaties.
Article 24 of the Law contemplates that the Government of the Russian Federation shall
appoint the executive authority to oversee the co-o rdination of direct foreign investments to the
economy of the Russian Federation. Such authority has not been defined yet.
(e) State-trading practices
Question 85.  
Concerning issues discussed in WT/ACC/RUS/27:WT/ACC/RUS/38
Page 45
Concerning the Federal Agency for Food Market  Regulation - we look forward to reviewing
Government Resolution No. 392  "On the Economic Operations of the Agro-Industrial Sector in
1998" and Government Resolution No. 315 to learn more about the planned activities of the
Federal Agency for Food Market Regulation.
What is the specific title of Government Resolu tion No. 315?  Has it been submitted to the WTO
Secretariat?
Answer:
In 1998, Resolution No. 315 “On Formation of the Authorised Fund of the State Unitary
Enterprise “Federal Agency for Food Market Regulation” under the Ministry of Agriculture and
Foodstuffs of the Russian Federation” of 14 March 1998, and Resolution No. 392 “On Economic
Conditions of Functioning of the Agricultural I ndustry Complex of the Russian Federation in 1998”
of 15 April 1998 were adopted.
Resolution No. 315 of 14 March 1998, obligates the Ministry of Agriculture and Foodstuffs
of the Russian Federation to form the authorised fund  for the said federal agency in the amount of 100
million Rubles using (i) the funding sources stipulated in Resolution No. 1224 of the Government of
the Russian Federation “On Formation of the State Unitary Enterprise “Federal Agency for Food
Market Regulation” under the Ministry of Agriculture and Foodstuffs of the Russian Federation”, and(ii) funds returning as payment of arrears of credits extended by the Federal Food Corporation under
the Ministry of Agriculture of the Russian Federation pursuant to Resolution No. 970 of the
Government of the Russian Federation “On Fundin g Procurements of Grain and Other Agricultural
Products for the Federal Reserves in 1995” of 29 September 1995.
Resolution No. 392 of the Government of the Russian Federation sets “the quota for
procurement volumes and available working assets of the State Unitary Enterprise “Federal Agency
for Food Market Regulation” under the Ministry of Agriculture and Foodstuffs of the Russian
Federation”. The Federal Agency for Food Market Regulation is responsible for “arrangement and
carrying out of procurement interventions and commod ity interventions with a view to stabilising the
market for unprocessed agricultural products and foodstuffs”.
Before October 1999 no interventions were ever made in the Russian market for unprocessed
agricultural products and foodstuffs.
Question 86.  
We would also be interested to hear more about the new procedure recently approved for
commodity intervention purchases , that will be carried out by the Federal Agency for Food
Market Regulation.
Answer:
The procedure for state procurement interventions and commodity interventions aimed at
stabilising the market for unprocessed agricultural products and foodstuffs was approved by
Resolution No. 748 of the Government of the Russ ian Federation “On Approval of the Procedure for
State Commodity Intervention Purchases Aimed at Stabilising the Market of Unprocessed
Agricultural Products and Foodstuffs and the Regulations on the State Agent Performing StateRegulation of Unprocessed Agricultural Products and Foods Market” of 10 July 1998 (attached).
This Procedure envisages procurement interventions by arranging procurements and mortgage
operations in unprocessed agricultural products and foodstuffs, and commodity interventions by
arranging sales from federal and regional food reserves.WT/ACC/RUS/38
Page 46
Procurement interventions are made in cases where market prices for unprocessed agricultural
products and foodstuffs drop below the minimum level or where the agricultural producers are unable
to market their unprocessed agricultural products and foodstuffs because of declining demand.
Commodity interventions are made to remedy any deficit in the market for unprocessed
agricultural products and foodstuffs, as well as any increase of the market prices above the maximumlevel of their fluctuation in the unprocessed agricultural products and foodstuffs market.
Procurements and sales of unprocessed agricultural products and foodstuffs in the course of
state procurement and commodity interventions are carried out exclusively by  participants in the
relevant market who are selected by state agents on the basis of tender.
See also answer 85 herein.
4. Policies Affecting Foreign Trade in Agricultural Products
Question 87.  
Article 6.5 of the Law provides for the application of a “special duty” to agricultural products
for which an investigation is being conducted, which can remain in effect until the end of the
calendar year at a rate that does not exceed the applied rate by one-third.  This provision does
not appear to conform to Article 5 of the WTO Safeguards Agreement  (Article 6.5 also bears
no resemblance to the special safeguard provisions contained in Article 5 of the WTOAgreement on Agriculture, which is not, in any case, relevant, since this provision of the
Agreement was developed for use by GATT members during the Uruguay Round and was used
only for products subject to tariffication.)
Please explain the rationale for this provision a nd its relation to WTO requirements.  If, as it
appears, the provision is not consistent with the WTO, how does Russia intend to bring it intoconformity?
Answer:
According to Article 5.1.a of WTO Agreement on Agriculture any country can update its
import duties if “the volume of imports of that product entering the customs territory of the
Member…  during a year exceeds a trigger level” which can potentially damage the economy of theMember.
Paragraph 4 of the same Agreement further states: “Any additional duty imposed under
subparagraph 1a shall only be maintained until the end of the year in which it has been imposed, and
may only be levied at a level which shall not exceed one third of the level of the ordinary customs
duty in effect in the year in which the action is taken”.
Thus, there is no inconsistency between Article 6 of the Federal Law “On Measures to Protect
the Economic Interests of the Russian Federation with Respect to Foreign Trade in Products” andArticle 5 of the WTO Agreement on Agriculture.
Question 88.  
Article 16 of the Law concerns import limitations related to federal development programmes
and implementation of measures to li mit production of agricultural goods.
Are there any agricultural programmes currently in  effect or under development that fall under
the scope of Article 16.1 of this law?WT/ACC/RUS/38
Page 47
For example, in October 1998, Deputy Prime Minister Kulik announced four “special”
programmes for poultry, pork, grains, and agricultural machinery.  Would these programmes
be considered “federal development programmes” or would they be covered by one of the other
categories (e.g., programmes to protect sectors undergoing structural reorganization) listed in
Article 16.1?
How would quantitative restrictions applied in the context of such programmes be consistent
with the requirements of Article 4 of the Agreeme nt on Agriculture, which prohibits the use of
non-tariff barriers except as otherwise provided for in Article 5 and Annex 5 of the Agreement?
Answer:
A number of federal programmes were launched with a view to developing certain branches
of the agro-industrial production sector in the Russian Federation and certain types of agricultural
products. These programmes will be maintained until 2000. However due to the lack of funds theprogrammes have not been implemented in full.
In adopting the said programmes, no distinction is made between “development programmes”
and “programmes to protect sectors undergoing structural reorganization”. Programmes for poultry,
pork and grains are currently being developed and therefore have not taken effect yet. Also in its
development stage is the special-purpose federal programme “Stabilisation and Development ofEngineering and Technical Base of the Agro-Industrial Complex of Russia (“Machinery for Food
Production in Russia” 2000 – 2006)”.
The “Engineering Auxiliary for Russian Agro-Industrial Complex in 1993 – 1998”
programme might have fallen under Article 16.1 of the Federal Law “On Measures to Protect the
Economic Interests of the Russian Federation with Respect to Foreign Trade in Products” if certaintypes of new competitive machinery had been manufactured. However, this programme, which was
not implemented in full, has been closed.
Article 16 of the Law “On Measures to Protect the Economic Interests of the Russian
Federation with Respect to Foreign Trade in Products” will not in any way affect Russia’s compliance
with the commitments it undertakes for the purposes of its accession to the WTO. After the accessionall and any import limitations will be fully consistent with the WTO disciplines.
Question 89.  
There are persistent reports indicating an immi nent shift in Russian policy towards greater
protection from imports and State intervention  in the agriculture and food sectors.  Please
describe recent developments in domestic policy that affect agricultural trade, e.g.:
- the activities of the Commission on Stabilization of the Consumer Market and the
provisions of Government Resolution No. 1190, “On Measures for Stabilization of theConsumer Market of the Russian Federation;” and
- the recent Government Resolution on pric ing policy in agro-industrial production.WT/ACC/RUS/38
Page 48
Answer:
Resolution No. 1190 “On Measures for Stabilisa tion of the Consumer Market of the Russian
Federation” adopted by the Government of the Russian Federation on 12 October 1998, states that the
main task of the Commission for Stabilisation of the Consumer Market is to organise the process of
elaborating measures and decision-making with regard to food and other socially significant productsand drugs supplies to the population, as well as coordination of work of the federal executive
authorities of the regions of the Russian Federation regarding the stabilisation of consumer market.
Thus, Section 11 of the Resolution states that all federal executive authorities concerned must
submit agreed proposals to the Government of the Russian Federation regarding (1) restrictions on the
exports of seeds of oil-yielding plants (sunflower, soy and rape) from the Russian Federation; (2)
deferrals and instalment payments in respect of customs payments on imported machinery for food
and drugs production that has no domestic counterparts.
Resolution No. 1268 “On Introduction of the Licensing Requirement for Exports from the
Russian Federation of Seeds of Sunflower, Rape and Soya Beans” was adopted on 31 October 1998
further to Section 11 (non-tariff regulation).
Section 12 requires that proposals regarding the adjustment of customs tariff rates of the
Russian Federation as well as other measures of foreign trade regulation be made to the Commissionof the Government of the Russian Federation for Protective Measures in Foreign Trade and Customs-
Tariff Policies with a view to supplying the consumer market and protecting the interests of Russian
producers.
Further to Section 12, Resolution No. 1203 “On Food Products Subject to a 10 per cent Value
Added Tax and an Additional Import Duty for Agricultural and Food Products and Drugs” wasadopted on 15 October 1998 and continued in effect until 30 June 1999. Also in furtherance of
Section 12, Resolution No. 1226 “On Partial Change of Import Customs Rates” was adopted on
21 October 1998 for a term of 6 months and was then extended by the Resolution of the Government
of the Russian Federation No. 458 dated 21 April 1999 for another 6 months.
See also WT/ACC/RUS/31, page 3.In order to implement Federal Law No. 100-FZ of the Russian Federation “On State
Regulation of Agro-Industrial Production” dated 14 July 1997, the Government of the Russian
Federation took Resolution No. 295 “On Pricing Policy in the Sphere of Agro-Industrial Production”
dated 16 March 1999 which provides for development of proposals regarding the formation of pricing
policy in the agro-industrial complex.
The above Resolution stipulates fixing guaranteed procurement prices for agricultural
products to be procured to satisfy federal state needs in 1999.
The resolutions referred to in the Answer have been submitted to the WTO Secretariat.
Question 90.  
Could Russia provide information about plans for agriculture support for the future,
particularly plans for 1999 and any sectors that will be targeted specifically for increased
assistance?WT/ACC/RUS/38
Page 49
Answer:
Pursuant to Federal Law No. 36-FZ of the Russian Federation “On Federal Budget for 1999”
of 22 February 1999, state assistance will be provided to agricultural producers in the following
forms:
- wool subsidies;
- subsidies for mixed fodder procurement for animal farms and poultry factories;
- subsidies for the production of flax and hemp;
- partial compensation of costs of mineral fertilisers and means of chemical protection
of plants;
- subsidies to pedigree stock;
- compensations to support production of high-grade seed.
Below find the Annex to Resolution No. 392 of the Government of the Russian Federation of
15 April 1998 On Distribution of the Federal Budget Resources for 1998 Under Section Agriculture
and Fishing, Earmarked for Goal-Oriented Subsidies and Grants in the Following Areas (thousand
Rubles):
Target subsidies and grants – total 2,933,639.3
- including;  state support of programs and activities in development of plant-
growing, total, of which:1,717,339.8
- subsidies and compensations for support of elite seed-growing 85,000
- partial compensation of outlays for electric, thermal energy, natural
gas and other kinds of fuel used in production of vegetables in
protected soil at specialized enterprises subsidies for raw flax and
hemp, being marketed by agricultural commodity producers48,500
83,700
- subsidies for soy beans, being marketed by agricultural commodity
producers35,000
- partial compensation of outlays borne by agricultural commodity
producers to purchase mineral fertilizers and chemical means of crop
protection1,250,000
- partial compensation of outlays borne by agricultural commodity
producers to insure agricultural crops130,000
- including repayment of 1997 debts 50,000
- resources allocated for setting up the federal funds of seeds 85,139.8
- state support of programs and activities for development of cattle-
breeding – total of which:830,500
- subsidies and compensations for support of pedigree breeding in
cattle-breeding339,500
- subsidies for support of sheep-breeding 291,000
- partial compensation of cost of mixed feed, being purchased by pig-
breeding plants and broiler-breeding plants200,000
- other subsidies and grants – total, of which: 385,800
- partial compensation of expenses for veterinary and sanitary waste
recovery plants38,500
- partial compensation of expenses for energy resources being used by
flax and hemp processing enterprises10,000
- resources for setting up of the federal insurance and seasonal fund of
spare parts and other material and technical resources250,000
- resources for setting up of the federal insurance fund of veterinary
preparations87,300WT/ACC/RUS/38
Page 50
Question 91.  
We would also be interested in the current role  and any future plans for State enterprises, such
as the federal food agency, which have previously had State trading rights.
Answer:
The chief areas of activity of the state unitary enterprise “Federal Agency for Food Market
Regulation” under the Ministry of Agriculture and Foodstuffs of the Russian Federation are defined in
Resolution No. 1224 of the Government of the Russian Federation “On Formation of the State
Unitary Enterprise “Federal Agency for Food Market Regulation” under the Ministry of Agriculture
and Foodstuffs of the Russian Federation”.
See Answers 85 and 86.
Question 92.  
We would also be interested in information on support to agriculture that is provided at the
sub-federal level.
Answer:
In 1997, the Russian Federation regions appropriated 21.2 trillion Rubles for agriculture and
fishing, against 16.7 trillion Rubles in 1996. Information on support for agriculture granted out ofbudgets of all levels is available in the annual statistical publication «Main Indices of Financial and
Economic Activity of Agricultural Enterprises in the Russian Federation».
Question 93.  
Re. "Rescheduling until the year 2005 of the budget  debt of enterprises of the agro-industrial
sector" (Statement on measures approved 31 October 1998).
We would appreciate a definition of the "agro-industrial sector" that would clarify the activities
that would fall under such a heading as well as cl arification of the State enterprises to which the
budget debt is owed, the magnitudes involved and the terms according to which such debt is
being rescheduled.
Answer:
Enterprises and organisations in «Food Industry» and «Agriculture» Sectors according to the
All-Union Classifier «Sectors of National Economy» are attributed to enterprises and organisations of
agro-industrial sector with codes according to the Classifier: 18,000, 20,000 – 223,000 respectively.
Agricultural producers include enterprises and organisations, including private farms,
attributed to the «Agriculture» Sector, engaged in production of vegetable and animal products,
fishing, hunting, fur trade and gamekeeping, as well as fishing artels (collective farms) producing fish
and other bio-resources of water. The «Agriculture» Sector also includes organisations supportingagriculture: those dealing in operation of irrigation and melioration systems, agricultural water supply,
stations (activist groups) for protection of plants and forests, parks and gardens from diseases and
pests, quarantine examinations, agro-chemical laboratories and other, Codes 20,000 to 22,300.WT/ACC/RUS/38
Page 51
Other agro-industrial complex enterprises include the following enterprises, which are not
attributable to agriculture, but fall within the scope of the Ministry of Agriculture and Foodstuffs of
the Russian Federation:
- Veterinary and sanitary utilisation plants for production of flesh-osseous flour;
- Enterprises in flour and groats production and elevator industry;
- State enterprises producing medicines for veterinary purposes; organisations
supplying agricultural producers with goods to be used in veterinary treatment and
zootechnics (zoovetsnabs);
- Enterprises supplying agricultural producers and enterprises in agro-industrial
complex with goods and machinery (agrosnabs);
- Forestry farms and associations of forestry farms;
- Enterprises for primary processing of wool, flax and hemp;
- Enterprises for repair of tractors and agricultural machinery, maintenance and
servicing of agricultural machinery;
- Stations for production and testing of machinery;
- State centres of agro-chemical service;
- Stations for plants protection in the Russian Federation regions;
- Organisations carrying out agro-chemical works;
- Organisations producing fish, sea animals and whales and engaged in wild animals
breeding;
- Procurement organisation and enterprises engaged in procurement, processing and
storage of seeds of agricultural plants (state unitary enterprises for herb seeds, seedgrowing stations, seed breeding firms and organisations, branches of the 'Russian
Seeds' firm, 'Rossotsemovosch' organisation, corn grading by size plants, sugar beet
seeds processing plants, flax seeds station);
- Specialised organisations engaged in water-supply construction and amelioration
works.
Food Industry Sector includes enterprises producing foodstuffs, Codes 18100 to 18192, and
enterprises producing meat products, butter and cheese products, dairy products and fish products,
Codes 18200 to 18300.
Under resolution No. 1147 of the Government of the Russian Federation of 2 October 1997
“On Granting a Deferment (Instalment Payment Mode) to Agricultural Producers, Enterprises and
Organizations of the Agricultural Complex in the Year 1998 in Respect of the Arrears of Payments to
the Federal Budget” agricultural producers, organisations providing technical support for agriculture,enterprises in food industry and other enterprises in agro-industrial complex irrespective of their
organisational and legal form and form of property were entitled to a deferment of payments due to
the Federal Budget.
Besides, the above Resolution contained a recommendation for the executive authorities of
the Russian Federation regions and local administration to grant deferments in respect of payments toregional and local budgets respectively.
Budget debt restructuring was effected in the form of granting a deferment (instalment
payment mode) in respect of the arrears outstanding as at 1 January 1998. The deferment (instalment
payment mode) was granted for 5 years to mature in 1 January 2000. Interest is accrued at the rate of
5 per cent per annum.WT/ACC/RUS/38
Page 52
Question 94.  
Re. "Ensuring the repayment of loans from the federal budget by subjects of the Russian
Federation whose agriculture suffered from drought" (Statement on measures approved
31 October 1998).
Could Russia please clarify the situation that is referred to here?  To which sub-federal
governments had these loans been made?  What amounts were lent, and on what terms?
Answer:
During the 1998 drought, record temperatures of  37° to 42° C were reached during the day
across a number of regions along the Volga, in th e Central Chernozemny district, North Caucasus,
Urals and Siberia in May 1998 and persisted without any precipitation. The minimum relative
humidity dropped to 13 – 16 percent, the hydrothermal coefficient ranged from .4 – .6. In a number of
areas, temperatures were the highest recorded in more than 100 years.
The drought and other natural calamities affected 48 regions of the Russian Federation,
42561.1 thousand hectares of agricultural crops, out of which 12503.5 thousand were completely
destroyed. The estimate of the damage inflicted by the drought was 13169.3 million Rubles.
With a view to providing financial assistance to  agricultural producers to counter the effects
of the drought and other natural calamities, the Government of the Russian Federation issued OrderNo. 1469-r “On Providing Assistance to Agricultural Producers in Remediation of the Effects of
Drought and Other Natural Calamities” on 12 October 1998. The Order stipulated the use of general
allocations in the “Agriculture and Fishing Sectio n” of the 1998 federal budget to: (i) repay the debts
of the regions of the Russian Federation  to the federal budget under commodity credits received by
agricultural producers for oil derivatives in 1995 and mixed and fish fodder purchase in 1996; (ii)repay budget loans to cover the temporary cash deficiency under centralised credit facilities received
in 1992 – 1994; and (iii) repay federally owned bonds issued by regional governments of the Russian
Federation in three trenches to mature in 1998 – 2000 in repayment of the indebtedness to the federal
budget under commodity credits for oil derivatives received in 1996, and the arrears of coupon
income thereon .
The case in question concerns repayment of arrears of federal budget loans that had been
provided to organizations of the agricultural industry complex under a commodity credit for the
delivery of fuels and lubricants received by them in 1995 and 1996 for the purposes of springtime
field and harvesting works.  It also covers the purchase of fodder for poultry factories and animal
farms, under security guarantee of administrations of Russian Federation subjects on condition of
repayment at 10 per cent annual interest.
The amount of coupon income on the bonds is fixed between 10 and 30 percent, depending on
their maturity term.
As for the budget loan to cover the temporary cash deficiency, it was a non-interest bearing
budget loan received by the regional governments of the Russian Federation in repayment of payroll
arrears to employees of organizations financed from the federal budget.
According to the above Order, administrations of the regional governments of the Russian
Federation must compensate the agricultural producers affected by the drought for the damages
suffered within the amount of available relief, including by means of repayment of the above debts of
agricultural producers to the budgets of the respective Russian Federation subjects.WT/ACC/RUS/38
Page 53
Pursuant to Order No. 1469-r of the Government of the Russian Federation of
12 October 1998, assistance was provided in the form of reductions of debts of Russian Federation
subjects to the federal budget:
- under the commodity credit for oil derivatives received in 1995 in the amount of
2580.3 million Rubles;
- of repayment of federally owned bonds issued by Russian Federation subjects in
payment of debts to the federal budget under the commodity credit for oil derivatives
received in 1996 and arrears of coupon income thereon in the amount of 403.22
million Rubles;
- under budget loans received to cover the temporary cash deficiency overdue or
becoming due in 1998 in the amount of 803.3 million Rubles;
- under centralised credit f acilities received in 1992 – 1995 in the amount of 937.9
million Rubles;
- under the part of land tax and lease payment for land (royalties) for 1995 – 1997 in
the amount of 86.3 million Rubles centralised in the federal budget.
See also Answer 95 herein.
Question 95.  
Re. "Subjects of the Russian Federation and enterprises of the agro-industrial sector ...
repaying a part of their debts to the federal budget for previously granted budget loans by
supplying socially significant foodstuffs to organizations that are financed out of the federal
budget" (Statement on measures approved 31 October 1998).
Do these arrangements involve an element of de bt forgiveness that could act as a subsidy in
terms of the WTO Agreement?
When will this activity cease?
Will the Russian Government or its agencies ma ke any advantage to the subjects of the Russian
Federation and the enterprises of the agro-industrial sector conditional upon these repayments
in kind being made?
Answer:
In 1997, a number of regions received state funding (in the form of non-interest-bearing
loans) with a view to payroll payments to employees of budgetary organizations, such as medical and
health institutions and secondary schools, on condition of repayment within 6 months.
Due to the revenue deficiency of the Federal and local budget, certain regions of the Russian
Federation failed to  repay the loans on time.
On 12 October 1998, the Government of the Russian Federation adopted Resolution
No. 1469-r to commit 4,813.7 million Rubles to support regions affected by drought and natural
calamities in 1998. However, due to the Federal Budget deficit the Ministry of Finance of Russia was
instructed to, upon agreement with the regional administrations, offset the outstanding debts of such
regional administrations of the Russian Federation in  respect of repayment of budgetary loans against
the relevant amount of assistance in the funds commitment. The Ministry of Finance was furtherinstructed to provide assistance out of the local budget to agricultural producers affected by natural
calamities.WT/ACC/RUS/38
Page 54
Thus, it is not a case of writing off AIC (Agro-Industrial Complex) debts, but rather
repayment of mutual obligations.
Appendix 4 to Resolution No. 1469-r of the Government of the Russian Federation
Distribution of repayment of debts of the Russian Federation regions to the federal Budget in respect
of budgetary loans received to cover the cash gap, outstanding before or from 1998
(million Rubles)
Karachai-Cherkess Republic 8.1
Republic of Mordovia 79.0
Republic of Tatarstan 112.2
Chuvash Republic 16.3
Volgograd region 36.8
Omsk region 9.8Orenburg region 139.3
Rostov region 106.2
Samara region 13.5
Saratov region 131.8
Chelyabinsk region 133.6Chita region 16.7
Question 96.  
Re. "Financial assistance to the budgets of the subjects of the Russian Federation out of the
federal budget ... (to) be made dependent on timely current payments to ... Other budgetorganizations out of the budgets of the subjects of the Russian Federation" (Statement on
measures approved 31 October 1998).
Could Russia please clarify what are the "other budget organizations" that are referred to
here?  Could examples of such organizations be supplied?  Do they include, for example, the
federal food corporation?
Do any such budget organizations enjoy exclusive supplier rights in relation to the provision for
sale of any products or services in Russia as a whole or any part of Russia?  If so, we would
appreciate details of all such organizations whic h enjoy such rights, and of the products and/or
services concerned.
Answer:
The definition of other budgetary organisations includes regional organisations and local
administrations receiving budgetary funds.
According to Article 18 of Law No. 4807-1 of the Russian Federation dated 15 April 1993
“On the Principles of the Budget Rights and the Rights to the Formation and Use of Extra-budgetary
Funds Enjoyed by the Representative and Executive Bodies of the Republics Within the Russian
Federation, Its Territories, Regions and Autonomous Formations, the Cities of Moscow and St.
Petersburg, and the Local Administrations”: “The budget of current expenditures includes theexpenditure on the current maintenance and overhaul (complete renovation) of public utilities,
environmental control facilities, educational establishments, public health and social security
institutions, science and culture, physical culture a nd sport, mass media, organs of state power and
administration, local self-government bodies, and other expenditures not included in the expenditures
on development”.WT/ACC/RUS/38
Page 55
This means timely payroll payments to employees of budget-financed organisation, such as
employees of regional newspapers, radio, television, utilities, etc.
In September 1997, based on the proposal with th e Ministry of Agriculture and Foodstuffs of
the Russian Federation, the Government of the Russian Federation passed Resolution No. 1224 on
liquidation of the Federal Foodstuffs Corporation affiliated with the Ministry of Agriculture andFoodstuffs. Thus the Federal Foodstuffs Corporation is currently being liquidated. The Government of
the Russian Federation is currently considering the draft resolution «On Approval of Regulations on
the Commission of the Government of the Russian Federation for Repayment of the Indebtedness of
the Federal Foodstuffs Corporation, Affiliated with the Ministry of Agriculture and Foodstuffs of the
Russian Federation and Currently under Liquidation, to the Federal Budget» and the draft Regulations
on the Commission of the Government of the Russian Federation for repayment of the indebtedness of
the Federal Foodstuffs Corporation, affiliated with the Ministry of Agriculture and Foodstuffs of theRussian Federation and currently under liquidation, to the Federal Budget.
There is no monopoly for the Russian housing and utilities sector, thus exclusive rights may
be granted by regional and local authorities to various organisations in respect of different kinds of
services, e.g. garbage removal, etc., based on the results of open tenders. Such contracts, however,
shall be made for a fixed term and upon the expiration of such terms new tenders shall be held.
The Regulations on organisation of procurement of goods, works and services for state
purposes confirmed by Decree No. 305 of the President of the Russian Federation dated 8 April 1997
provide that a customer has the right to place orders for procurement of products for state needs from
a single source upon given the consent of the Ministry of Economy of the Russian Federation or the
authorised territorial author ity in the following cases:
a) if there is an urgent demand of products , in connection with which the holding of a
tender (bidding) or the use of any other method of the placement of orders for the
purchase of products for the State needs is inexpedient, provided that the
circumstances that have conditioned the urgent demand could not have been foreseen
beforehand and they have not been the result of slow actions of the customer;
b)  if due to certain emergency circumstances there has arisen a pressing demand of a
certain product, in connection with which the use of any other methods of placing the
orders for the purchase of the product for the State needs is inexpedient with regard to
the expenses of time.
c) if a product may be obtained only from one  supplier or if a single supplier enjoys
exclusive rights with respect to a product and an equivalent substitute is non-existent;
d) if there are circumstances permitting the customer to hold a specialized closed tender
(a closed bidding) in accordance with the present Regulations, in case the customer
has established that the making of purchases from a single source is the best method
thereof.
V. TRADE-RELATED INTELLECTUAL PROPERTY REGIME
1. General(c) Membership of international intellectual property conventions and of regional or
bilateral agreements
Question 97.  
So far, the Russian Federation has not yet b ecome a member of the International Convention
for the Protection of Performers, Producers of Phonograms and Broadcasting Organizations(Rome Convention).  Does the Russian Federation  intend to adhere to the Rome Convention?  IfWT/ACC/RUS/38
Page 56
such plans do exist, what is the time-frame within which the Russian Federation intends to join
this convention?
Answer:
One of the commitments of the Russian Federation under the Agreement on Partnership and
Co-operation with the European Union is for Russia to accede to the Rome Convention by the end of2002. Responsible ministries and departments within the Government of Russia are currently working
on what will be necessary for Russia to meet its obligations in this area.
Question 98.  
Does the Russian Federation intend to adhere  to the Hague Agreement of 6 November 1925
concerning the International Deposit of Indust rial Designs (Complementary Stockholm Act,
1967)?  If such plans do exist, what is the time-frame within which the Russian Federation
intends to join this convention?
Answer:
The Russian delegation took part in the Diplom atic Conference in Geneva in June 1999 which
adopted a new (Geneva) Act complementary to the Hague Agreement on International Deposit of
Industrial Designs. The Russian Federation signed the Final Act of the Diplomatic Conference and
Geneva Act. The internal procedures necessary for the Russian Federation to be bound by theprovisions of Geneva Act will be completed over 1999 – 2000.
2. Substantive Standards of Protection, Including Procedures for the Acquisition and
Maintenance of Intellectual Property Rights
(b) Trademarks, including service marks
Question 99.  
During the last plurilateral meeting, the Russian delegation mentioned the elaboration of
"methodological recommendations" concerning th e definition of well-known trademarks.
Please describe these recommendations in more detail.
Answer:
Draft “Methodological Recommendations Conc erning the Definition and Recognition of
Well-Known Trademarks in the Russian Federation”  have now been completed. In addition, draft
“Rules of Recognition of a Trademark as a Well-Known Trademark in the Russian Federation” are
being elaborated.
Both documents contain:
- the notion of “well-known trademark”;
- factors (information) that are taken into consideration when determining whether a
trademark is a well-known trademark in the Russian Federation. Among such factorsare: information evidencing wide use of the trademark in the Russian Federation,
information confirming the effective costs of advertising and information confirming
the value of the trademark; and
- confirmation of the results of consumer opinion polls.WT/ACC/RUS/38
Page 57
Moreover, the Rules are intended to regulate the procedure of submission and consideration
of applications for recognition of a trademark as a well-known trademark, and the decision-making
procedure. The draft Rules are expected to introduce a specific Schedule of well-known trademarks in
the Russian Federation.
Question 100.  
How will the draft law on trademarks, service marks and appellations of origin treat the
question of the protection of well-known trademarks in relation to goods or services which are
not similar to those in respect of which a trademark is registered (Article 16, paragraph3 of the
TRIPS Agreement)?
Answer:
A draft Federal Law “On Amendments and Supplements to the Russian Federation Law “On
Trademarks, Service Marks and Appellations of Origin of Goods” contemplates that protection ofwell-known trademarks will extend to any goods and services.
The wording of Article 7 of this draft Law provides as follows:
“A mark cannot be registered if it is identical to or similar to the extent of confusion with:
Trademarks of other persons, protected by international agreements of the Russian
Federation, including those duly recognised as well-known trademarks…”.
(h) Requirements on undisclosed information, including trade secrets and test data
Question 101.  
Please explain in detail how the Russian legislat ion in force complies with the requirements of
Article 39, paragraph 3 of the TRIPS Agreement, which provides for the protection of
registration data?  Does the law in force contain a provision regarding the protection of testdata against unfair commercial use?  Under which conditions does the law foresee that test data
submitted in a previous registration procedure can be used in a subsequent registration
procedure?
Answer:
Anti-monopoly legislation does not regulate the issues of protection of confidential
information by executive authorities issuing marketing licenses for pharmaceutical preparations or
agrochemical products. If the information submitted to such authorities and duly identified as
confidential is used by a juridical or natural person  without the consent of the owner who is entitled to
dispose of such information, such actions of such juridical or natural person can be classified as unfair
competition under Article 10 of the Law of the Russian Federation No 948-1 “On Competition and
Restriction of Monopoly Activity on Commodity Markets” dated 22 March 1991 (revised as of
6 May 1998).
Protection of clinical test data against unfair use is granted by the Rules on Conducting
Clinical Quality Tests in the Russian Federation (adopted in 1997). These Rules are harmonised with
the rules of good clinical practice (GCP) and are consistent with ICH requirements. National GCP
Rules contain requirements with regard to conducting clinical testing including confidentiality of
information, which latter is also discussed in the protocol of testing that is signed by both theresearcher and the applicant. Any failure to comp ly with the requirements regarding the protection of
clinical test data against unfair use as defined by the Law of the Russian Federation No 86-FZ “OnWT/ACC/RUS/38
Page 58
Medicinal Substances” dated 22 June 1998 (Art. 39), entails liability under the legislation in force in
the Russian Federation.
Access to initial documents is restricted to those conducting examinations for licensing
purposes, and monitors and auditors appointed by the sponsor. A monitor ensures that the research is
proceeding in accordance with prevailing rules and documented, and must use his/her best efforts toprotect the confidential information provided.
The use of data submitted in a previous registration procedure is allowed in a subsequent
registration procedure performed by the same entity, provided that no side effects have been revealed
in the meantime and the effectiveness and safety of the medicine concerned have not been disputed.
Information submitted in the course of registration procedure of medicines qualifies for
commercial secret under the Russian legislation. The relevant legislative provisions are contained in
documents WTO/ACC/RUS/ 7 and WTO/ACC/RUS/29.
4. Enforcement
- Border enforcement
Question 102.  
Please describe for us what the draft amendments to the Customs Code would authorize
customs authorities to do and provide an update on the status of the legislation.
Answer:
Work on the preparation of the draft Customs Code of the Russian Federation is currently
underway.
The draft incorporates a large number of new regulatory provisions, which will update the
legal regulatory framework on the basis of this draft Russian Customs Code.
The draft Customs Code contains a larger number of self-executing regulations than the
existing Customs Code. Where further more specific acts are necessary, the statutory acts of the State
Customs Committee of Russia must be agreed with the ministries and departments concerned.
In accordance with Article 9 of the draft Customs Code the State Customs Committee will be
endowed with authority to issue statutory acts in respect of customs processes where contemplated bythe draft [ ПС?] of Russia.
- Enforcement of judgements
Question 103.  
TRIPS Article 41 provides that intellectual proper ty right holders should be afforded “remedies
which constitute a deterrent to further infringements.”
With regard to enforceability of judgements, we would appreciate information relating to
establishment of the bailiff service to assist in collection of judgements, and any examples of useof the bailiff’s service to enforce judgements in intellectual property cases.WT/ACC/RUS/38
Page 59
Answer:
Remedies constituting a deterrent to further infringements include measures protecting the
right holder against infringements of exclusive rights. These measures are stipulated in Article 12 of
the Russian Federation Civil Code, Article 49 of the Law of the Russian Federation No 5351-1 “On
Copyright and Related Rights” dated 9 July 1993; Ar ticle 18 of the Law of the Russian Federation No
3523-1 “On the Legal Protection of Computer Prog rams and Databases” dated 23 September 1992;
articles 31 and 32 of the Patent Law of the Russian Federation No 3517-1 dated 23 September 1992;
Article 46 of the Law of the Russian Federation No 3520-1 “On Trademarks, Service Marks and
Appellations of Origin of Goods” dated 23 September 1992; and Article 11 of the Law of the Russian
Federation No 3526-1 “On the Legal Protection of Layout Designs of Integrated Microcircuits” dated
23 September 1992.
Notable among measures provided in order to prevent further infringements of exclusive
rights are the rights of seizure of counterfeit copies of works as security for a claim in accordance
with Article 50 of the Law of the Russian Federation “On Copyright and Related Rights”, rights of
seizure of computer programs or databases contem plated by Article 19 of the Law of the Russian
Federation No 3523-1 “On the Legal Protection of Computer Programs and Databases” dated
23 September 1992, and prohibitions of the defendant performing certain acts, and prohibitions ofother persons performing certain acts with regard to the subject of dispute.
- Damages and/or expenses
Question 104.  
How do judicial authorities remove infringing  goods from the stream of commerce in such a
way as to avoid harm to the right holder, as required by TRIPS Article 46?
Answer:
Pursuant to TRIPS Article 46, in order to provide an effective remedy against rights
infringement, judicial authorities have a right to issue a writ ordering removal of infringing goods
from the stream of commerce to avoid harm to the rights holder, or, provided that it is consistent with
existing constitutional requirements, ordering destruction of such infringing goods.
Similar procedures are provided by Russian legislation. In particular Article 49.4 of the Law
of the Russian Federation No 5351-1 “On Copyright and Related Rights” dated 9 July 1993 provides
an option for a court (arbitration tribunal) to make a judgement effecting confiscation of counterfeit
copies of works or phonograms, as well as materials and equipment used for their reproduction. In
keeping with Article 50.2 of the Law, the court or the judge can issue a decision, in their sole
discretion, to seize all suspected counterfeit copies of works and phonograms, as well as materials and
equipment used for their production and reproduction.
In order to protect the rights of right holders and ensure the legitimacy of seizure of
counterfeit copies, the court can order an examination where appropriate.
- Criminal Law Amendments
Question 105.  
Does the Code of Criminal Procedure require that police take statements from witnesses (who
are then required to testify at trial) before seiz ing suspected counterfeit goods or pirated works?WT/ACC/RUS/38
Page 60
Answer:
The Code of Criminal Procedure of the RSFSR does not provide any specialised proceedings
for any particular category of cases, including those that deal with protection of intellectual property.
Existing procedures for investigation of a crim inal case in accordance with the Code of
Criminal Procedure of the RSFSR do not provide for the taking of a witness statement before seizureof suspected counterfeit goods. Witness testimony is just one of the possible methods of proof.
Chapter 14 of the Code of Criminal Procedure of the RSFSR contains provisions on seizure of
items during an official search for all categories of cases. Paragraph 4 of Article 169 of the Code of
Criminal Procedure of the RSFSR stipulates that the right to be present during the investigator’s
activities and to make statements regarding such acti vities (which statements must be included in the
protocol), must be explained to the persons subjected to official search, witnesses at the time of the
search and legal representatives.
Question 106.  
Is it the common practice of local prosecutors to reinvestigate intellectual property cases
referred by Ministry of Interior or Tax Police before initiating court proceedings?
Answer:
According to Article 126 of the Code of Criminal Pro cedure of the RSFSR, preliminary
investigation is obligatory in cases of infringement of copyright and related rights, inventor and patent
rights (intellectual property rights) (Articles 146, 147 of the Criminal Code of the Russian
Federation), and pursuant to Part 3 Article 126 of the Code of Criminal Procedure of the RSFSR such
preliminary investigation must be carried out by the local prosecutors. The activities of the internal
affairs authorities are restricted to conducting inquest of cases of the given category wherepreliminary investigation is obligatory.
Among other things, they must take measures to seize suspected counterfeit goods or pirated
works and phonograms, as well as materials and equipment intended for their production and
reproduction (Article 50 of the Law of the Russian Federation No 5351-1 “On Copyright and Related
Rights” dated 9 July 1993). After all issues that require immediate action have been addressed, thecase is transferred to an investigator. Subsequent investigation of the case by local prosecutors does
not constitute reinvestigation, but rather continued investigation in keeping with the requirements of
the law.
Legislation in effect in the Russian Federation does not contemplate reinvestigation of cases
connected with infringement of intellectual property rights. Prior to filing, all criminal cases must be
investigated by prosecutors, as is provided by Articles 213 and 214 of the Code of Criminal Procedure
of the RSFSR.
In the course of proceedings, a court, in accordance with Article 232 of the Code of Criminal
Procedure of the RSFSR, is entitled to return the case for further investigation. The case is then
transferred for further investigation to the prosecuto r with the reasons for such return specified and a
description of circumstances that must be further clarified provided.WT/ACC/RUS/38
Page 61
- General statistics and information
Question 107.  
The enumeration of cases at the bottom of page 6 of WT/ACC/RUS/29 refers to cases
“registered”.  Does “registered” mean that prosecutors have initiated legal actions in courts?  If
not, what is the meaning of “registered” in this paragraph?
Answer:
720 crimes were registered under Articles 146, 147 and 180 of the Criminal Code of the
Russian Federation over 1997. This means that there were 720 criminal actions brought under the said
articles. Certain of these cases were dismissed on grounds provided by the Code of Criminal
Procedure of the RSFSR, and certain were set for trial.
Question 108.  
If prosecutors have brought legal actions involv ing 720 crimes in 1997, is it possible to provide
an update indicating in how many cases to date, criminal penalties have been imposed?  We
would also appreciate any details about the cases that can be given.
Answer:
See Answer 111 herein.
Question 109.  
On page 7 of WT/ACC/RUS/29, it is stated that the Ministry of Internal Affairs is drafting
amendments to the Criminal Code and the Code of Criminal Procedure.
Please describe what these amendments would do and give us an idea of the status of the
legislation.
Answer:
The Draft contemplates amending and supplem enting Articles 117 and 126 of the Code of
Criminal Procedure of the RSFSR in order to aut horise the internal affairs authorities to perform
preliminary investigation of crimes under Articles 146, 147, 180 of the Criminal Code of the Russian
Federation, and also to authorise tax police agencies and customs agencies to conduct inquest of
crimes under the above articles. Amendments and supplements to Articles 146, 147, and 180 of theCriminal Code of the Russian Federation concerning the definition of damage on a large scale and the
possibility of resorting to confiscation of counterfeit goods as penalty therefor are also being prepared.
The Ministry of Internal Affairs of Russia has completed a draft Federal Law “On
Amendments and Supplements to Article 146 of the Criminal Code of the Russian Federation and to
the Code Criminal Procedure of the RSFSR". The amendments proposed to the Parliament relate to
the increase in the term of punishment and definition of the notion of “income on a large scale”.
The above draft Law amending and supplementing the Criminal Code and Code of Criminal
Procedure with regard to protection of intellectual pr operty rights is currently in the interdepartmental
negotiating stage.WT/ACC/RUS/38
Page 62
- Decisions regarding rights
Question 110.  
On page 15 of WT/ACC/RUS/29, it mentions that  242 appeals from decisions of Rospatent on
patent and trademarks were considered in 1997, as compared with 287 in 1996.  Figures for
appeals considered by the courts are also given.
We would appreciate it if you could provide the figures for patents and trademarks separately,
either during this meeting or at a later date.
Answer:
In 1998 the Appellate Chamber of Rospatent received 381 objections to decisions taken based
on the examination results for applications for:
inventions 132
utility models 7industrial designs 3
trade marks 234
appellations of origin  5
Objections have been coming in about the same proportion for these types of industrial
property over the past several years, the only new development being that the proportion of objections
regarding trademarks, appellations of origin and industrial designs has increased compared to
objections attributable to inventions and utility models.
In 1998, the Rospatent department functioning in its capacity as the Higher Patent Chamber,
received 63 complaints and 22 applications, out of which two applications concern recognition of
well-known trademarks in the Russian Federation.
Appeals Inventions Trademarks Appellations of
Origin
Complaints
- regarding decisions of Apellate
Chamber33 4 -
- against registration/issue of
letters patent71 8 1
Applications - 22 -
Total 40 44 1
In 1998 the courts processed the following total number of claims regarding decisions taken
by Rospatent in respect of applications for: inventions – 21; trademarks – 12; utility models – 2.
- Civil and arbitrage proceedings
Question 111.  
Please provide information on the number of case s regarding each form of intellectual property
and  an indication of the region s in which these cases were brought.
It would be useful to have similar kinds of additional details in connection with the disputes
before the arbitrage courts.WT/ACC/RUS/38
Page 63
Answer:
293 crimes were registered in Russian regions und er Article 146 of the Criminal Code of the
Russian Federation (infringement of copyright and related rights) in 1997, and 619 crimes in 1998.
Under Article 147 of the Criminal Code of the Russian Federation (infringement of inventor and
patent rights) there were 46 and 18 crimes registered respectively in 1997 and 1998, and under Article180 (illegal use of trademark) 381 and 437 crimes respectively.
According to forensic statistics, in Russia the number of cases for each particular type of
intellectual property is relatively small, which is why they are not shown in forensic statistical sheets
as separate entries but are included in “cases regarding protection of intellectual property” section.
This includes civil suits for protection of rights of authors, performers, producers of phonograms,
programs and cable broadcasters, rights with regard to computers, right of inventors and trademark
owners, and other cases, resolved on the basis of intellectual property legislation.
The number of cases since the new intellectual property legislation came into effect remains
substantially the same from year to year. Statistics demonstrate that in 1998, 472 cases regarding
intellectual property rights protection were filed with the courts of the Russian Federation as
compared with 570 cases in 1997 and 450 in 1996.
The figures for intellectual property rights cases processed by courts, show that numerous
cases were successful. In 1996, this category of lawsuits resulted in 280 court decisions, of which 211
granted the plaintiff’s claim, which makes up 65.9 per cent of the total; in 1997, 340 decisions were
made, of which in 272 the plaintiff’s claims were granted, which makes up 80 per cent. In 1998 the
courts awarded 287 judgements, 208 out of them to satisfy, which makes up 72.5 per cent. According
to available data regarding this category of cases, 4934.018 thousand Rubles and US $4000 werelevied as damages or fines or moral damage.
In 1998, the largest number of cases regarding protection of rights in intellectual property
were considered by Moscow courts (79 court judgements), Rostov Oblast (18 judgements),
Kaliningrad Oblast (13 judgements), Astrakhan, Nizhegorodskaya, Novgorod, Ulyanovsk and
Volgograd Oblast (8 judgements each); 6 judgements were awarded by St. Petersburg courts. Thepercentage of satisfied claims as we have already indicated is high. Moscow courts satisfied 55 claims
(out of 79 total), which is 69.6 per cent; in Rostov Oblast 13 claims were satisfied in 18 judgements,
which is 72.2 per cent. A similar situation with this category of cases is observable in courts of other
regions.
According to the Arbitration Proceedings Code of the Russian Federation, arbitration
tribunals have jurisdiction to consider cases of economic disputes arising out of civil, administrative
and other relations.
In 1998, arbitration tribunals considered a total of 202 disputes connected with protection of
rights of intellectual property. The largest number of disputes (132) were processed in the Moscow
region. 28 disputes were considered by the Arbitration Court of the city of St. Petersburg and
Leningrad Oblast, and 8 disputes were considered by the Arbitration Court of Sverdlovsk Oblast.
Question 112.  
Please provide data or specific examples of searches and seizures authorized by the courts
under Article 50.2 of the Law on Copyright and Neighbouring Rights.WT/ACC/RUS/38
Page 64
Answer:
Regrettably, while showing the amounts exacted as fines or compensation, the statistics do
not contain information on how often the courts resort to seizure of counterfeit copies to secure a
claim and what volume of counterfeit goods are confiscated following a judgement.
We are thus unable to inform WTO members of the number of court judgements regarding
prohibition of use of trademarks under the Law of the Russian Federation “On Trademarks, Service
Marks and Appellations of Origin of Goods”.
See also Answer 111 herein.
- Administrative proceedings
Question 113.  
For example, what was the average fine assessed of the 742 individuals found to be using copies
of copyrighted works or phonograms illegally?  What was the average value of the goods seizedin accordance with the 329 decisions regarding seizure?
Answer:
The total fines imposed in 1997 amount to 405,177 Rubles. The average fine is 546 Rubles,
which is about 6.5 minimum wages.
Question 114.  
With regard to the 65 actions for unfair competition brought by the Anti-Monopoly Committee
in 1997 and the 35 actions so far this year:
How many involved copyrighted works, how many trademarked goods?
Is it possible to update this information to reflect actions that have occurred since these actions
occurred?
Answer:
The total fines imposed in 1997 amount to 405,177 Rubles. The average fine is 546 Rubles,
which is about 6.5 minimum wages.
- Criminal proceedings
Question 115.  
The section on criminal actions indicates that the militia of the Ministry of Internal Affairs has
uncovered a considerable number of instances of copyright piracy and trademark
counterfeiting.  We are concerned, however, that the number of prosecutions appears to be very
small in light of the number of positive investigations.
For example, of the 293 instances in which the militia determined copyright piracy existed in
1997, apparently only 30 cases were filed.  Please explain the procedure that is followed in
carrying out investigations and that followed by prosecutors in determining to bring cases andactually filing them.WT/ACC/RUS/38
Page 65
Answer:
The statistics are misquoted. The figure 30 is not the number of criminal actions brought for
copyright piracy and trademark counterfeiting, but instead, according to the official statistics, the
number of criminal cases filed. The procedure of carrying out an investigation and the procedure
followed by prosecutors in determining whether to bring an action and file a case are regulatedentirely by the provisions of Criminal Code of the Russian Federation and Code of Criminal
Procedure of the RSFSR.
The procedure of carrying out investigation of criminal cases contemplated by articles 146
and 147 of the Criminal Code of the Russian Federation is contained in the answers to Questions 105
and 106.
Question 116.  
Of the 425 crimes revealed by the militia in the first half of 1998, how many have prosecutors
made the subject of legal action?  How many of the 425 investigations dealt with copyrighted
works or phonograms and how many with trademarks?
Answer:
Of the 425 crimes reported in the first half of 1998, 78 criminal cases regarding intellectual
piracy were filed, according to the statistics. It is impossible to subdivide the 425 reported crimes intotypes according to whether they dealt with copyrighted works or phonograms or trademarks, because
there are no separate statistics for these criteria.
Question 117.  
Please provide more details regarding the 400 million Rubles worth of goods seized by the
militia.  For example, during what period were the goods seized?  How much of the goods wereinfringing copyrighted works; how many neighbouring rights in phonograms; and how many
trademarked goods?  Of the 80 legal actions br ought against individuals, how many have been
completed and, of those, how many resulted in a penalty and what were those penalties?
Answer:
The material damage inflicted in 1997 and first half of 1998 attributable to protection of
intellectual property items amounted to 400 million Rubles.
It is impossible to distinguish between cases of infringement of copyright and related rights
for lack of statistics.
The material damage incurred under article 146 of the Criminal Code of the Russian
Federation in 1997 amounted to 119,050 thousand Ru bles, and to 240,981 thousand Rubles  in 1998;
under article 180 of the Criminal Code of the Russian Federation – to 5,270 thousand Rubles in 1997,
and 3,851 thousand Rubles in 1998.
See also Answer 111 herein.WT/ACC/RUS/38
Page 66
- Undisclosed information
Question 118.  
During an earlier plurilateral meeting regarding  the obligations of the TRIPS Agreement, the
delegation of the Russian Federation stated that it was unnecessary to provide separate
protection to data submitted as a condition for marketing approval of pharmaceutical oragricultural chemical products because the Law on Unfair Competition and the provisions in
the Civil Code on trade secrets were adequate to protect such data against disclosure or use by
others in a manner that would constitute unfair competition.
In this case, why is it necessary for Russia’s Customs Code to contain, as it does in Article 14, an
express provision to protect commercial secrets and confidential information provided customs
authorities.  This provision also expressly prov ides for liability of the customs agency and its
officials should they divulge such information.
If the Customs Code provisions are necessary to protect customs information, why aren’t
separate provisions necessary to protect IPR-related information as well?
Answer:
The Civil Code of the Russian Federation (hereinafter “CC of the Russian Federation”) does
not prohibit inclusion of commercial secrets protection regulations in specific legislation. Suchregulations contained in specific legislation apply only inasmuch as they do not contradict the CC of
the Russian Federation. Express provisions regarding protection of commercial secrets communicated
to executive authorities are contained in a number of statutory acts regulating the activity of such
authorities besides the Customs Code of the Russian Federation.
Thus, the obligation of the anti-monopoly authorities not to disclose any information
pertaining to commercial secrets that is submitted to them, is contemplated by Article 15 of Law of
the Russian Federation No. 948-1 “On Competition and Restriction of Monopoly Activity on
Commodity Markets” of 22 March 1991 (revised as of 6 May 1998). The same Article states that in
the event of disclosure by the officials of a federal anti-monopoly authority (territorial authority) of
information pertaining to commercial secrets, the damage thus inflicted must be compensated underapplicable civil legislation.
The Customs Code of the Russian Federation stipulates (Article 16 “Treatment of Information
Submitted to Customs Authorities of the Russian Federation by State Agencies, Enterprises,
Institutions, Organizations and Citizens for Customs Purposes”) that information received by the
customs authorities in the course of customs control procedures is confidential, is to be used only for
customs purposes and must not be disclosed. This extends to all information including information
that deals with intellectual property.
This is why the customs authorities currently re lease information to rights holders in a very
restrictive manner to avoid disclosure of confidential information of the importer.
The relevant amendments are contained by the new draft Customs Code.
See also Answer 101 herein.WT/ACC/RUS/38
Page 67
VI. TRADE-RELATED SERVICES REGIME
1. General
Question 119.  
This delegation is concerned about two draft laws which the Duma is contemplating. These
laws, if passed, may stand in the way of Russia presenting a liberal services offer.
The draft Tourism Law, which would restrict fo reign participation in tourism companies to no
more than 49 per cent and would also forbid foreign management in tourism companies
appears to be inconsistent with the WTO General Agreement on Trade in Services (GATS),
which is designed to eliminate government meas ures that prevent services from being freely
provided across national borders or that discri minate against locally-established firms with
foreign ownership.
The draft law “On the List Sectors, Industries and Activities Where the Operation of Foreign
Investors are Prohibited or Restricted” appears to place greater restrictions on foreign
investment in several areas.  A move to restrict foreign investment in the tourism and auditing
sectors will not only adversely impact compan ies currently operating in Russia, but will also
send the wrong signal to other investors contem plating establishing an enterprise in your
country.
Answer:
The draft Federal Law “On Amendments and Supplements to the Federal Law “On the Main
Principles of a Tourist Sector Operations in the Russian Federation” was vetoed by the President of
the Russian Federation. Subsequently, a new version was declined by the State Duma. Currently, a
draft is under consideration by a joint conciliatory commission of the State Duma and Council ofFederations.
In a letter to the Parliament, the President of Russia emphasised that limitations and
restrictions contained in the draft Law are not consistent with existing Russian law (including the
Russian Constitution) and that, therefore, the w hole concept of the draft Law should be revised.
Amendments and supplements provided under the draft Law are made with a view to
improving the regulation of the rapidly developing tourism services market, protection of consumer
rights and enhancement of the commitment of tour operators to quality and professionalism.
The draft Law “On the List of Sectors, Industries, Activities and Territories Where the
Operations of Foreign Investors Are Prohibited or Restricted” was passed by the State Duma on first
reading in February of 1997. It has been suggested that the State Duma expedite the procedures for
consideration of the Draft Law on its second reading. On 11 November 1999, the Draft Law was
vetoed at the second reading by the State Duma.
We believe therefore that it is too early to provide further details on the draft Law.
Question 120.  
Additionally, if passed, these laws would seri ously complicate negotiation of Russia’s WTO
services offer and potentially deny Russia the economic and technology-transfer benefits
associated with direct foreign investment.WT/ACC/RUS/38
Page 68
Please provide a status report on these prop osals and comment on the Russian Government’s
views as to the benefits of this legislation for Russian economic growth and trade development.
Answer:
See the Answer 119 herein.
A. Horizontal measures
Question 121.  
In part (a) of Question 153 (WT/ACC/RUS/9/add.3 refers) Russia was asked to provide more
information on the fact that the issuance of pe rmits for temporary entry of natural persons is
subject to quotas for foreign nationals, both as a group and by profession.  In part (b) Russia
was asked to explain why the issuance of permits for temporary entry of natural persons was
subject to an economic needs test.  Russia respo nded by referring to the answer to Question 196
of WT/ACC/RUS/9.  However, Russia's answer to Question 196 does not fully answer this
question.  It indicates only that Russia observes  the principle of the "priority right" of Russian
citizens to occupy vacant job places;  and that the Russian federal migration service approves
quotas for the employment of foreign nationals,  with the number of wo rkers offered licences
determined on the basis of "economic need".
Could Russia provide more information on the economic needs test, on how it is applied, the
criteria used, and on what basis it is applied (e.g. economy-wide, by profession, by sector).
Answer:
According to the current procedure for employment of foreign persons in the Russian
Federation, approved by Decree No. 2146 of the President of the Russian Federation dated
16 December 1993, there are no numerical or professional quotas maintained in respect of foreignlabour, either at the federal or at the regional level.  An employer may apply for a permit indicating
the number of foreign employees and professionals required and receive such permit.  Note however,
that  an employer does not have the right to employ more employees or professionals than is
stipulated for the period covered by the permit. Should additional input of foreign labour be required,
the employer would have to obtain a new permit.
For the purposes of attracting appropriate foreign labour to the regions of the Russian
Federation, economic needs are assessed by the executive authorities of such regions based, first and
foremost, on the current state of the local la bour market (unemployment figures, employment
opportunities for Russian citizens based in other regions and the significance of the success of projects
requiring foreign labour in the regions concerned, including their potential to create new jobs in such
region).
Question 122.  
In part (c) of the same question Russia was asked to clarify what was meant by the term "highly
skilled intra-corporate transferees (directors, ma nagers and specialists)".  Russia responded by
referring to Question 199 of WT/ACC/RUS/9.  However Russia's response to this question was
also incomplete.  In response to Question 199 Russia indicated that there was no established
procedure for determining the category "highly skilled and intra-corporate transferees", otherthan that they be in the "senior management of the enterprise".
Could Russia please clarify how these terms are currently Applied?  Do they imply that
specialists will only be granted entry if they are in senior management in the organization?WT/ACC/RUS/38
Page 69
We would also like to know whether Russia has considered developing criteria for determining
what is meant by highly skilled and intra-corporate transferees?
Answer:
The term “highly skilled intra-corporate transferees (directors, managers and professional
staff)” means key personnel.
The notion of key personnel includes:
a) senior officers of an organisation who principally manage such organisation under the
supervision of, and with guidance from, the Board of Directors or shareholders of the
business, including:
- those managing the organisation or a division, or subdivision of the organisation;
- those supervising or monitoring the work of other supervisors, professional staff and
managers; and
- those in a position to personally hire or dismiss, or recommend  hiring, dismissal or
other personnel changes;
b) employees possessing:
- extensive or unique qualifications, in jobs or occupations requiring specialist skills
and expertise;
- knowledge essential in the provision of organisational services, research equipment,
machinery or management.
In order to provide a more favourable treatment for investors, it is not necessary to obtain a
permit to employ foreign key personnel (which would be a time-consuming procedure). Instead, only
a confirmation of the right of employment is required.
Whether engagement of such employees is feasible is to be determined by the founders of an
enterprise with foreign capital.
As for the employment of workers, translators and support staff in such enterprises, there is
no discrimination in terms of their eligibility to work. The employer must obtain the relevant permit
for their engagement from the migration service, and then a confirmation of the right of employmentfor each employee for such permit.
The Ministry of Labour of the Russian Federation is considering developing criteria for
definition of  “highly skilled” and “intra-corporate transferees”.
Question 123.  
Our business has found procedures involved in obtaining visas to be relatively burdensome, in
particular where they intend to visit more than  one Russian city, and where changes to their
itineraries occur once they are in Russia.  The requirement for business visitors to obtain aninvitation from a well-established business esta blishment and to obtain visas for each Russian
city they visit are regarded as particularly burdensome.
Does Russia plan to simplify visa requirements for business people?  We would be happy to
provide details of our system for regulating th e temporary entry of business people in the
service sector, if this would be useful to Russian Authorities.WT/ACC/RUS/38
Page 70
Answer:
Entry of foreign visitors is regulated by the Law “On the Procedure of Exit from the Russian
Federation and Entry to the Russian Federation” dated 18 July 1996, and a number of regulations.
Entry visas for visits of a personal nature  are issued by the Passport and Visa Service of the
Ministry of Internal Affairs of the Russian Federation.
Tourist visas are granted on the basis of payment confirmation vouchers from the Tourist
Bureau.
As for trips for other purposes, according to “Regulations on Extending Invitations to Visit
the Russian Federation to Foreign Citizens and Stateless Persons” approved by Resolution No. 1142
of the Government of the Russian Federation dated 1 October 1998, invitations to the Russian
Federation for foreign citizens and stateless persons extended by Russian legal entities must be
approved by the Ministry of Internal Affairs of the Russian Federation or its regional offices,  bycompetent internal affairs authorities where no such regional offices exist, on the basis of a written
application by such legal entity.
Effective 1 October 1998, itineraries are not specified in  Russian visas.  All foreign
embassies in Moscow were officially informed of this change by Note No. DKS-33341 dated
30 September 1998.
B. Legal services
Question 124.  
Question 155 of WT/ACC/RUS/9/Add.3 referred to section c(a)(i) of WT/ACC/RUS/6, legal
services.  It asked whether the Russian Federation recognised foreign legal consultants (FLC),
and the procedures for becoming an FLC in Russia.  It also asked whether FLCs are permittedto give advice on international law, or only ho me-country law.  Russia responded by referring to
Question 219 through Question 231 of WT/ACC/RUS/9.  However, in Question 230
(WT/ACC/RUS/9) Russia indicated that the  MOJ licences do not cover legal advice on
international law.
Are there any plans to extend the cover age of licences to international law?
Answer:
Currently, pursuant to Federal Law No. 158-FZ “On Licensing of Certain Types of
Activities” dated 25 September 1998, legal services provided on a fee-paying basis are not subject to
licensing in the Russian Federation.
C. Registration requirements
Question 125.  
In response to Question 159 (WT/ACC/RUS/9/Add.3) Russia described the registration
requirements with regard to foreign banks.
Is registration of foreign investment in other sectors also necessary?WT/ACC/RUS/38
Page 71
Answer:
Under Article 20.2 of Federal Law No. 160-FZ “On Foreign Investment in the Russian
Federation” dated 9 July 1999, “a legal entity being a commercial organisation with foreign
investment is subject to state registration with the justice authorities”.
D. Licensing requirements
Question 126.  
Russia has provided additional information on licensing requirements for a number of sectors
in document WT/ACC/RUS/9.  Sectors for which licensing requirements have not been specified
include urban planning and landscape architecture (Question 242 WT/ACC/RUS/9), real estate,
rental and leasing services withou t operators, advertising services and mining industry services
(Questions 248, 250, 252, 254,WT/ACC/RUS/9).  We have also previously submitted questions
regarding the criteria used for licensing suppliers in communications, audio-visual andtransportation sectors.
We would be grateful for details of the licensing requirements in these sectors.  We would also
like to know for which sectors numerical quotas exist on the number of licences issued to foreign
companies. (Question 204, WT/ACC/RUS/9).
Answer:
1.     For Natural Persons: Licenses are granted only to Russian citizens with post-secondary
education in architecture, professional experience of no less than 2 years and familiar with
requirements related to design and construction in Russia. In some cases, licenses may be
given to Russian citizens without professional education in architecture but with a
professional record in the architectural field for a period of no less than 10 years.
2. For Russian Legal Entities: Licenses are granted to legal persons only if one of the entity’s
managers or a hired architect in charge directly of design work for the forms are licensed for
architectural activity. Legal persons are not subject to licensing requirements for design work
if they develop documentation exclusively for civil housing and if headed by a licensed
architect.
3. For Non-Russian Citizens and Foreign Legal En tities: Non-Russian citizens and foreign legal
persons can exercise architectural activity on the territory of Russia only in association with
architects - Russian citizen or Russian legal person licensed for architectural activity, unless
relevant international agreements permit foreign natural persons or legal entities to provide
these services independently.
4. Activities not Subject to Licensing:
The following activities are not subject to licensing:- architectural activity of citizens carried out under the management of licensed
architects;
- architectural activity and realization of architectural design of objects which are not
subject to construction permits; and
- participation in tenders/auctions on architectural design by the conditions of the
tender establish that licensing is not required.WT/ACC/RUS/38
Page 72
Realtor Services
- See Answer 130.
Rental and Leasing Services Without Operator
- Under legislation of the Russian Federation, the rental of vehicles without an operator
is not subject to licensing. There are, therefore, no licensing requirements withrespect to the rental of vehicles.
As for financial leasing, under Federal Law No. 158-FZ “On Licensing of Certain
Types of Activities” dated 25 September 1998, this type of activity requires licensing.
The licensing requirements with respect thereto are uniform and do not depend on the
subject-matter of the financial lease (e.g. financial lease of a vehicle).
The concept of financial leasing of vehicles is general in nature and no distinction is
made between leasing services with or without operators.
Transport
- Under Federal Law No. 158-FZ “On Licensing of Certain Types of Activities” dated
25 September 1998, licenses are issued to both domestic and foreign suppliers of
transportation services on a non-discriminatory basis in accordance with the
requirements of the Russian legislation.
The licensing requirements are as follows:
- a valid certificate (confirmation of professional qualifications sufficient to work as
operator or forwarder; availability of the necessary technical resources;
communications and information facilities; a clear technological service structure;
facilities and guarantees of available co-operation opportunities with Russiantransportation and road authorities; backup reserves);
- an approved list of services which the applicant intends to provide;
- guarantees of protection for  property rights of consumers in the event of lost or
damaged cargo or delayed delivery;
- ready availability of the applicant supplier to users of transportation services;
- commitment to keep the public and other cust omers informed of the activities, tariffs
and achievements; and
- other requirements as stipulated in Article 10 of the above Federal Law.
Licensing requirements in respect of certain types of transportation services include additional
quality restrictions.
Quotas on international transportation are imposed under inter-governmental agreements.
Question 127.  
Question 161 of WT/ACC/RUS/9/Add.3 refers to Russia's answer to Question 100 in
WT/ACC/RUS/2 which mentions the possibility of "special authorisation (licensing)".  Russia
responded by referring to Questions 288, 289, 290, 296 and 298 of WT/ACC/RUS/9.  These
responses only relate to the banking sector.
We are interested in learning whether the possibility of "special authorisation (licensing)" also
exists in non-banking sectors.WT/ACC/RUS/38
Page 73
Answer:
Federal Law No. 160-FZ “On Foreign Investment in the Russian Federation” dated
9 July 1999 provides non-discriminatory treatment for foreign investment, with certain exceptions
defined under legislation of the Russian Federation. Thus, licensing of certain types of activity under
Federal Law No. 158-FZ “On Licensing of Certai n Types of Activities” dated 25 September 1998
(earlier submitted) is not, in general, affected  by the presence of foreign investment.
However, special permits (licenses) for foreign investment may be required under this law for
certain types of activities which directly affect public health, national defence and state sovereignty or
which are associated with environmental protection or subsoil use.
Question 128.  
Question 377 WT/ACC/RUS/9/Add.2 asked whether there are any operat ing restrictions on
foreign accounting firms.  Russia responde d by referring to Questions 232 and 233
(WT/ACC/RUS/9).  However, in response to Question 232, Russia indicated that criteria
necessary to obtain an auditing licence are lis ted in Resolution of the Russian Government
No.482 dated 6 May 1994.
Could Russia please confirm that this document has been passed to the Secretariat (we would
appreciate a copy).
Answer:
This document has been submitted to the WTO Secretariat.
Question 129.  
Question 240 WT/ACC/RUS/9 relates to architectural services. Could Russia please indicate if it
is necessary for foreign architects and architec tural firms to become members of the National
Union of Architects to supply architectu ral services in the Russian Federation?
Answer:
The National Union of Architects of the Russian Federation is a private non-profit
organisation. Therefore, architectural service providers in the Russian Federation are not required to
be members of the National Union of Architects.
Question 130.  
In response to Question 248 WT/ACC/RUS/9/Add.2 Russia indicated that a draft "regulation on
the licensing of realtor activities" is expected to be prepared soon, in order to set up basic
nation-wide criteria for the licensing of real estate transactions.
What is the current status of this draft legislation?  What provisions regarding the licensing of
foreign realtors are contained in the draft legislation?  Can Russia confirm that the criteria
necessary to obtain a licence for the supply of real estate services are non-discriminatory as
between Russian nationals and foreigners and as between foreigners?WT/ACC/RUS/38
Page 74
Answer:
At present the real estate services sector (except services related to land) is governed in the
Russian Federation by the following main regulatory legal documents:
1. Federal Law No. 158-FZ “On Licensing of  Certain Types of Activities” dated
25 September 1998;
2. Federal Law No. 135-FZ “On Evaluation Services in the Russian Federation” dated
29 July 1998;
3. Resolution No. 1407 of 23 November 1996 of the Government of the Russian
Federation “On the Approval of Regulations on the Licensing of Realtor Services”;
and
4. Resolution No. 1418 “On Licensing of Certain Types of Activities” dated
24 December 1994.
Local self government authorities regulate services in the utilities sector.
Federal Law No. 158-FZ “On Licensing of Certain Types of Activities” dated
25 September 1998 requires licensing for the provision of realtor services. The main requirements in
terms of licensing and provision of services subject to licensing under Article 9, are compliance with:
(a) the legislation of the Russian Federation, (b) ecological, sanitary-epidemiological, hygienic andfire prevention rules and standards, and (c) specific regulations on licensing of particular types of
activities.
In accordance with the Regulations on Licensing of Realtor Activities, the applicant must
possess relevant expertise and experience to be eligible for licensing.
Under the “Policy Recommendations on Professional Evaluation and Certification of Realtor
Services Providers in the Russian Federation”, appr oved by Resolution No. 88-r of the State Property
Committee of the Russian Federation dated 27 February 1997, certification of individual
entrepreneurs and certain employees of legal entities, as listed below, is required for licensing
purposes:
- Chief Executive Officers and their deputies; managers of subdivisions directly
providing realtor services; and
- employees personally participating in conclusion of deals on behalf of the legal
entity.
No numerical quotas on licenses or other restrictions in respect of foreign companies are
imposed under the above regulatory instruments.
A draft Resolution of the Russian Federation Government “On Licensing of Certain Types of
Activities” is being developed by the Ministry of Economy of the Russian Federation to implementthe Licensing Law. The regulations on licensing of realtor services will be amended after approval of
the above resolution to conform therewith.
Question 131.  
In response to Question 249 (WT/ACC/RUS/9/Add.2), Russia indicated that some limitations on
the acquisition of real estate are set forth in section 2 of the State programme for theprivatisation of State- and municipality- owned enterprises in the Russian Federation.
Could Russia please provide details of what these limitations are, and if other restrictions on the
acquisition of real estate exist.WT/ACC/RUS/38
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Answer:
Limitations discussed in Answer 249 in document WT/ACC/RUS/ 9/Add.2 (page 87) only
deal with the privatisation of state property. In accordance with Federal Law No. 123-FZ “On
Privatisation of State Property and Principles of Privatisation of Municipal Property in the Russian
Federation” dated 21 July 1997, state property is subdivided as follows under the PrivatisationProgramme currently in effect (approved by Presidential Decree No. 2284 of the Russian Federation
dated 24 December 1993):
- property prohibited for privatisation;
- property continuing in state ownership until a decision is taken to release it;
- property to be privatised on condition of non-participation of foreign physical or legal
entities;
- property to be privatised based on a decision of the Government of the Russian
Federation.
Restricted participation of foreign persons in the privatisation of state property applies only to
the privatisation of enterprises, organisations and facilities of strategic importance for defence and
sovereignty of the Russian Federation.
Further, Special Section 10 of the Programme “Use of Foreign Investments” contains certain
permit requirements and procedures:
Foreign investors may participate in privatisation tenders on condition that they subsequently
notify the Ministry of Finance of the Russian Federation;
Participation of foreign investors in privatisation of units and enterprises of trade, public
catering, public utilities, and small (up to 200 empl oyees or balance value below 1 million Rubles as
at 1 January 1992) industrial, building and motor transport enterprises  requires the authorisation of
local authorities or their nominees;
Authorisations in respect of participation of foreign investors in privatisation of units and
enterprises in the defence industry (in which over 30 per cent of the total output is produced to  order),
oil and gas industry, extraction and processing of ores of strategic materials, precious and semi-precious stones, precious metals, radioactive and rare earth elements, certain enterprises in the
transport and communications sector, are granted by the Government of the Russian Federation or
governments of Russian regions (depending on the type of state ownership) simultaneously with the
issue of authorisations for privatisation of the said units and enterprises. At the conclusion of the
tender competition, the organisers must submit to the Government of the Russian Federation and
Federal Security Service of the Russian Federation, certain information regarding successful  foreign
bidders.
Foreign investment is not allowed in privatisation of state and municipal enterprises located in
the territory of a closed administrative area, except in those cases provided for under resolutions of the
Government of the Russian Federation.
No other restrictions are imposed on the participation of foreign investors in privatisation.WT/ACC/RUS/38
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E. Forms of commercial presence
Question 132.  
Question 372 of WT/ACC/RUS/9/Add.2 asked whether there are any sectors for which legal
entity requirements apply to commercial establishment.  Russia responded by referring to
Questions 274, 293, 294 (WT/ACC/RUS/9).
As these questions only refer to insurance and banking, could Russia please specify which other
sectors are also affected by legal entity requirements?  For example, in response to Question 234
WT/ACC/RUS/9 Russia indicated that foreign firms are able to establish wholly-owned
subsidiaries.  Is the establishment of branches also permitted?
Answer:
The following services are subject to the legal entity requirement:
- auditing services;
- architectural services;
- private detection and security;
- gold production;
- communications services;
- services auxiliary to production and distribution of ethyl alcohol; and
- railway transport services.
Under Federal Law No. 160-FZ “On Foreign Investment in the Russian Federation” dated
9 July 1999, foreign legal entities may set up branches and representative offices in the territory of the
Russian Federation.
However, under the Civil Code of the Russian Federation, branches and representative offices
are not regarded as legal entities of the Russian Federation. Therefore, establishment of branches and
representative offices of foreign legal entities is not possible in services sectors in which activity is
restricted to Russian legal entities.
Question 133.  
In response to Question 349 (WT/ACC/RUS/9/Add.2), Russia indicated that under current law
dealings in securities can be invalidated following the transaction.
Could Russia please indicate whether this is also the case in relation to purchases of property by
foreign investors.
Answer:
Any acquisition of property may be invalidated by a court should specific violations of
Russian legislation in force  be disclosed.
F. Telecommunications
Question 134.  
Question 382 WT/ACC/RUS/9/Add.2 asked whether foreign owned telecommunications
companies are permitted to provide services with access to the public switched network, and if
so, what conditions apply.  In response to Question 264 Russia indicated that there is non-WT/ACC/RUS/38
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discriminatory treatment of domestic and fo reign operators, "with the exception of the
provision of communications services with access to networks in general use".
Does networks in general use" refer to the public switched telecommunications network?  Could
Russia please clarify the extent of the exception?
Answer:
The Federal Law “On Communications” defines “publicly accessible network” as a
component of an integrated communications networ k of the Russian Federation which is available to
all physical and legal entities and which cannot be denied to any such entity. The procedure for
switching on to the publicly accessible communications  network is set forth in the “Switch-on Rules”
adopted by the Government of the Russian Federation on a non-discriminatory basis.
Question 135.  
In addition, Question 383 WT/ACC/RUS/9/Add.2 asked about licensing criteria for joint
ventures.
Are different criteria applied to joint ventures with foreign organizations than are applied to
domestic firms?
Answer:
Regulatory legal acts of the Government of the Russian Federation governing the procedure
for communications services licensing in the Russian Federation do not contain any discrimination or
special terms of licensing based on the type of ownership or proportion of foreign ownership.
Question 136.  
In response to Question 261 of WT/ACC/RUS/9, Russia indicated that responses to the
Questionnaire on Basic Telecommunications (ref.:  TS/NGBT/W/3 dated 15 July 1994) are being
prepared and will be submitted to the WTO Secretariat when completed.
Could Russia please confirm that this task has been completed?
Answer:
Work on this task is still underway.
Question 137.  
We have also raised a number of sector specif ic questions for which answers remain pending
(Questions 372-391).
Could Russia advise us on whether answers to these questions have been provided?
Answer:
The provision of services in the field of domestic and international express-mail is governed
by the Federal Law “On Communications” and “On Postal Communications” on a non-discriminatory
basis, and requires a licence.  Such a licence is required for Russian and foreign service providers aswell as for providers which are joint-ventures between Russian and foreign investors.WT/ACC/RUS/38
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The licensing criteria depend on the technical requirements to which materials submitted to
the Licensing Committee of the Ministry of Communications of the Russian Federation must
conform.
Under the current legislation, a registration fee is charged on foreign films and videos for
rental authorisation. The amount of fees is differentiated by categories of audio-visual products andthe form of their distribution in the territory of the Russian Federation (showings in cinemas,
distribution by videotape or disk, TV shows). Th e highest level of such fee is 20 minimum wages,
established under applicable federal law.  Please refer to the tables below.
Registration fees for the purposes of rental
authorisation for films and videos made outside the CIS
Ratio used in calculation of the fee rate
depending on the category of film 1 = 20 minimum wages)
1. Films awarded prizes at international and national festivals, winners of
cinematographic prizes; films produced with the participation of national filminstitutes and funds for the preservation and development of filmmaking art;
creations of high artistic value produced by leading filmmaking companies with
wide international distribution.0.05
2. a) Films acquired or produced under an agreement on cooperation;
b) Films produced 5 or more years before submission for registration, except
films of sexual content or those with predominant scenes of cruelty and
violence0.05
3. Films that do not belong to either of categories 1 or 2 1
Amount of registration fee expressed as a percentage of the rate fixed
for this category of films depending on the rental rights sought
The applicant holds the right to:
- Use of film in any form
- Showings in cinemas
- Distribution by videotape or disk
- TV showing (in addition to other rights)100 %
70 %
10 %
20 %
VII. INSTITUTIONAL BASE FOR TRADE AND ECONOMIC RELATIONS WITH
THIRD COUNTRIES
2. Economic Integration, Customs Union and Free-trade area Agreements
- Regional Integration Agreements
Question 138.  
Has Russia signed or acceded to any other preferential trade agreements since its last
submission to the WTO (WT/ACC/RUS/21/Rev.1/Add.2)?WT/ACC/RUS/38
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Answer:
Russia has not signed or acceded to any other preferential agreements since its last
submission to the WTO (W T/ACC/RUS/21/ Rev.1/Add2).
Question 139.  
Could Russia confirm that these preferential ag reements conform to the requirements of Article
24 of the GATT?
Answer:
See answer 138 herein.
Question 140.  
Could Russia confirm that it does not regard its regional preferential agreements as posing any
barrier to its own or any other country’s accession to the WTO?
Answer:
Russia confirms that it does not regard its regional preferential agreements as posing any
barrier to its own or any other country’s accession to the WTO.
- Partnership and Cooperation Agreement with the European Communities (PCA)
Question 141.  
With regard to possible discrimination between European Communities' products and WTO
Member's products on entry into the Russian te rritory, we are surprised to note that Russia
mentions special cases.  More specifically, we should like to know the meaning of the sentence,
"the scope of the MFN clause in the PCA and in certain other trading agreements between
Russia and other WTO Members may differ from case to case, reflecting the historical
conditions under which the respective agreements were concluded".
Answer:
It is not clear what document you are quoting. Please advise the number and date of the
document and the exact page.
Question 142.  
We should also be grateful for details on the forthcoming stages of implementation of a free-
trade area between the European Communities and Russia in the areas of goods, services and
movement of capital.  In other words, does a specific plan of action already exist?
Answer:
Article 3 of the Agreement on Partnership and Cooperation reads as follows: “The Parties
undertake to consider development of the relevant Titles of this Agreement in particular Title III and
Article 53 as circumstances allow with a view to the establishment of a free trade area between them.
The Cooperation Council may make recommendations on such development to the Parties. Suchdevelopments shall only be put into effect by virtue of an agreement between the Parties inWT/ACC/RUS/38
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accordance with their respective procedures. The Pa rties shall examine together in the year 1998
whether circumstances allow the beginning of negotiations on the establishment of a free trade area.”
There were no negotiations initiated in 1998.
This issue is under discussion by a sub-committee for trade and industry under the Committee
for Cooperation of Russia and the EC.
The next meeting had been scheduled for the spring of 1999 but was postponed (a new date
has not yet been set).
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