RESTRICTED
WORLD TRADE WT/ACC/RUS/4/Add.1
30November 1995
ORGANIZATION(95-3919)
Original: English
ACCESSION OFTHE RUSSIAN FEDERATION
Additional Questions andReplies
Addendum
ThePermanent Mission oftheRussian Federation hassubmitted further replies* toquestions
raised atthemeeting oftheWorking Party heldon17-19 July1995 withtherequest thattheybe
circulated tothemembers oftheWorking Party. Thequestions andreplies arereproduced hereunder.
_______________
*Note: Thisdocument contains, inaconsolidated form, questions transmitted inwriting bymembers
oftheWorking Party inrelation todocument WT/ACC/RUS/2. Theconsolidated questions
arenumbered asAdditional Question, i.e."A.Q.1" etc.WT/ACC/RUS/4/Add.1
Page2
A.Q. 72. Alsoreserved toState ownership are"entities which receive more than50percent
oftheirfinancing from thefederal budget oftheRussian Federation".
What does thisstatement mean? What sortofproduction ordistribution firmor
enterprise currently receives more than50percentofits"financing" fromthefederal
budget?
Please provide theWorking Party withalistofthese firms andenterprises, andnote
those thatareinvolved inanywayininternational trade.
Howisthisfinancial assistance provided, e.g.through loans, direct financial transfers,
orother means?
When these firms nolonger require suchalevel ofState support, willprivatization
bepermitted?
Answer 72. Astheprivatization process gathers momentum, thenumber andrange ofcompanies
retained inState ownership keeps decreasing. TheRussian sideright nowdoesnot
haveanymore detailed information ofinterest totheparty making therequest, but
willbeprepared toprovide itatalaterstage.
A.Q. 132. Question 66-By1October 1994theFederal Bankruptcy Agency (FBA) hasdeclared
only516firms insolvent. Thissmall number reflects thelimited capacity oftheFBA.
Apresidential decree ofOctober 1993specified thatthebankruptcy lawwould enable
theFBAtoacquire defactocontrol ofenterprises undergoing bankruptcy proceedings,
butthebodywhich decides whether afirmshould bedeclared bankrupt istheseparate
Bankruptcy Arbitration Court (BAC). TheBAC rather thantheFBA thusseems to
bethekeybodyforbankruptcy proceedings inRussia. Itwould beveryuseful tohave
amore precise account ofboththeinstitutions andtheprocedures forbankruptcy.
Furthermore, anoverview ofthenature ofthevarious decisions made bytheBAC
would beuseful.
Answer 132. Presently, measures arebeing taken inRussia tofindtheenterprises andorganizations,
whose financial position isunstable (i.e.which areinsolvent). Incompliance withthe
decision oftheGovernment oftheRussian Federation of20May1994, No.498the
Federal Insolvency (Bankruptcy) Department recognizes asinsolvent andhaving an
inadequate financial structure thosefederal Stateenterprises andorganizations inwhose
assets theportion (contribution) oftheRussian Federation (asState owner) exceeds
25percent.AsofSeptember 1995, theFederal Department hasreviewed more than
13000 enterprises. About 3000 ofthem were declared bankrupt.
Atthenextstage steps willbetaken tohelpimprove theirfinancial position through
appointing newmanagers toovercome thecrisis andother arrangements, including
mandatory privatization ofthese enterprises (organizations), their saleasintegral
property complexes, theirliquidation andthesaleoftheirproperty (assets), thesale
oftheState-owned shares ofjoint-stock companies, andState support tothem or,if
necessary, bringing them tothearbitration courts.
Inaddition, theFederal Department actsinthename oftheState ascreditor, when
thematters ofinsolvency (bankruptcy) aredecided, irrespective ofthelegalinstitutional
forms ofenterprises andtheforms ofownership incases when theyfailtomake due
payments intothebudget orthenon-budgetary funds.WT/ACC/RUS/4/Add.1
Page3
A.Q. 150. Question 71-Please provide afulllistofalltypes of"federal", "regional" and"local"
taxes. -Itisstated thatbenefits aregiven tocompanies engaged inproduction activity.
What doestheterm"production activity" mean?
Answer 150. Theanswer toQ.71 ofWT/ACC/RUS/2 gives thefulllistoffederal taxes. Forthe
fulllistofregional andlocal taxes seetheanswer toA.Q. 141.Asfortheterm
"production activity" inquestion itshould beclarified thatintheanswer toQ.71
(WT/ACC/RUS/2) itwasstated thatcertain privileges were granted tocommodity
producers, which arebased onwellknown terms. Also itwasstated thatcertain
privileges weregranted toenterprises thatusedtheirprofits forinvestments ofalltypes.
Seealsotheanswer toA.Q. 142.
A.Q. 168. Indetailing thesystem of"centralized credits tosupport enterprises inthemost
important sectors oftheeconomy", theRussian delegation liststhenumerous actsthat
apply tothese sectors, butdonotprovide anyencapsulated summary ofwhattheacts
mean. Nordotheyindicate nowcredits aredisbursed toState-owned industries or
sectors oftheeconomy.
- Could theRussian delegation please provide amore comprehensive summary ofits
credit policy, indicating byname which areas oftheeconomy aredeemed "most
important", andlisting thebreakdown ofeachsector 'scredit receipts. What portion
ofthose sectors/industries areState-owned?
Answer 168. Inpursuance oftheRussian Federation Government 'sdecision of13December 1994,
No.1375 theGovernment Commission onCrediting Policy hasbeenrenamed asthe
Government Commission onFinancial andMonetary-Crediting Policy.
Inaccordance withtheRFGovernment 'sdecision of1July1995, No.666"On
Confirmation oftheStatute oftheGovernment Commission onFinancial and
Monetary -Crediting Policy" thisCommission establishes thevolume ofcentralized
crediting resources, which arechannelled torefinance commercial banks forthepurpose
ofenabling them toextend additional credits.
A.Q. 171. Russia hasexpressed itsintention tocontinue reductions intheamount ofbudgetary
support itgives toindustry andhasstated itsreadiness toundertake theobligations
oftheWTO onsubsidies andcountervailing measures.
What progress hasRussia made onreducing itsbudget financing inpower generation
andconstruction? Aremechanisms inplace thatwould insure compliance withWTO
disciplines?
Could Russia please illustrate howitstraderegime operates inthose areas thatreceive
federal budget financing orsubsidies? What aretheeffects these subsidies haveon
foreign trade?
Answer 171. Theabove replies, inouropinion, alsoanswer thisquestion (seereplies to
A.Q.s 167-170). Asfarasspecific measures toobserve therequirements ofthe
Agreement onSubsidies andCountervailing Measures areconcerned, weareprepared
todiscuss thisproblem aspartofbilateral consultations withanyinterested party.WT/ACC/RUS/4/Add.1
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A.Q. 172. Does theRussian Federation haveanyfurther information onthepossible justification
ofsupport tothecoalindustry under Article 8oftheAgreement onSubsidies and
Countervailing measures? (L/7410 1.3.2)
Answer 172. Theexamination oftherelationship between thesupport ofthecoalindustry andthe
Agreement onSubsidies andCountervailing Measures (andArticle 8ofthisAgreement)
isnowbegin carried outinRussia. Thefirstresults ofthisassessment areexpected
in1996.
A.Q. 182. Regarding Questions 76-77 ofWT/ACC/RUS/2 -Russia hasindicated thatitisready
toundertake measures tohaveitstrade remedies legislation conform withitsWTO
obligations. Could Russia advise astohowitintends toimplement WTO obligations;
i.e.willtheWTO text(retheSubsidies Agreement, bothsubsidies andcountervail
provisions) form partofRussia 'snewtrade law; andwillanyobligations be
implemented through other laws, regulations, administrative practices?
Answer 182 After acceding totheWTO, Russia willassume therelated scope ofobligations and
rights. Itisprepared todiscuss thespecific related details during bilateral consultations
withanyinterested party.
A.Q. 187. Theanswer toquestion 83makes nomention ofthedairyindustry. Could sector specific
information beprovided? (page 40,question 83)
Answer 187. Milk anddairy product output intheRussian Federation in1990-1995:
Q-tyunit 1990 1991 1992 1993 1994 1995/*
MILK PURCHASES ths.tons 39,835 34,175 26,148 24,637 18,831 15,500
PRODUCTION:
BUTTERths.tons 828 724 740 689 462 390
FATCHEESE ths.tons 439 385 291 303 272 205
Whole-milk products ths.tons 18,229 16,356 8,284 6,944 5,756 4,200
Drywhole milk ths.tons 186 158 149 133 114 122
Canned milk millions of
conventional
cans950 762 625 680 575 510
[Percapita]
consumption ofmilk
anddairy products in
terms ofmilkkg 386 347 281 294 284 239
/*estimate.
Milk production inRussia isnolonger subsidized.
A.Q. 193. RegardingQuestions88-90ofWT/ACC/RUS/2-TheRussiancoalindustrywillreceive
1.1trillion rubles insubsidies in1995. Weunderstand thattherelationship between
thissupport andtheAgreement onSubsidies andCountervailing Measures willbe
examined further. Isthisexamination being carried outandifso,when canassessment
beexpected?WT/ACC/RUS/4/Add.1
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Answer 193. Seetheanswer toA.Q. 172.
A.Q. 222. (marker) Thereply toquestions 119-124 indicate thatthere arenooverall lawson
services. Wewould appreciate descriptions andeventually textsofanynewlawswhich
maybeindevelopment relating tointernational trade inservices astheybecome
available.
Answer 222. SeeAddendum onGATS andlistoflegislation submitted totheWTO Secretariat by
theRussian Government.
A.Q. 285. Thereply toquestions 186-9 indicate thattheterms ofimport origin inRussia areset:
(a)under theAgreement onUnified Rules Determining theorigin ofGoods of
Developing Countries, signed inMoscow on5June1980, when tariffpreferences are
provided through theGeneralized System ofPreferences; and(b)under theRules of
Determination ofOrigin ofGoods, approved bythedecision oftheCouncil ofHeads
ofGovernment oftheCommonwealth ofIndependent States, dated 24September 1993,
andbytheDecision onChanges toArticle 10oftheRules ofDetermination ofOrigin
ofGoods, dated 24September 1993, adopted bytheHeads ofGovernment ofthe
Commonwealth ofIndependent States on15April 1994 when CISorigin istobe
established.
Could Russia provide adescription oftheterms ofthese regulations?
Answer 285. These regulations [have already been/will be]provided totheSecretariat. Wewould
begrateful iftheSecretariat distributes them among theWorking Party'smember
countries. Asfarasthedistinctive features oftherulesforthedetermination oforigin
which areapplicable inCIScountries areconcerned, theymake more stringent
requirements ontheprocedure forexecuting documents (including additional
requirements regarding theprocedure fortheircompletion andauthentication) and
provide forasingle criterion ofsufficient processing, namely achange inthefirstfour
digits ofthecommodity code.
A.Q. 307. CanRussia nowelaborate onitsAnnex toquestions 211-213?
A.Q. 308. Regarding Russia 'sanswer toquestion 212,
By"additional consideration", doestheRussian Federation mean thatitisprepared
tomake necessary amendments totherelevant lawsandrules ifthissystem isfound
tobeinconsistent withArticles VandVIIIofGATT? Ifso,which specific lawsor
rules areexpected tobeamended, andinwhatway?
Answer 307,308.
Russia iscurrently making acomparative analysis ofGATT/WTO disciplines and
Russian legalacts,including matters covered byAdditional Questions 307and308.
Wewould beprepared toprovide areply upon thecompletion ofthisanalysis. The
Russian Federation willseektocomply withtheGATT/WTO requirements mentioned
inA.Q.s 307and308withaccount taken oftheexisting economic andtechnical
possibilities. Ifneedbe,thisissuemaybediscussed during consultations withtheparty
orparties concerned.WT/ACC/RUS/4/Add.1
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A.Q. 320. Regarding Questions 228-229 ofWT/ACC/RUS/2 -"Current practices arebeing
reviewed tobring theminconformity withtherelevant recommendations oftheKyoto
Convention". Please provide more details onthemeasures Russia isimplementing.
A.Q. 321. Please clarify atwhat stage theRussian Federation isatinbringing current
inspection/certification practices inlinewith theKyoto Convention? (page 105,
questions 228,229).
Answer 320,321.
Russia iscurrently analysing existing legislation andthepractices ofitsapplication.
TheStateCustomsCommitteeandotheragencieshavebeeninstructedtoissuerespective
directions. Seealsotheanswer toA.Q.s 307and308.
A.Q. 322. Question 230-Theresponse should cover other points ofentry inaddition toports.
Answer 322. Russia doesnotdesignate anyspecial points ofentry forcustoms purposes forany
specific goods. This alsofollows from theanswer toA.Q. 230. That there are
specialized points ofexit/entry foroil,oilproducts, grain, andother commodities
transported inbulkandrequiring special cargo handling facilities isexplained solely
bytechnical reasons.
Current practices, inparticular theKyoto Convention, allow thedesignation ofspecial
customs houses toclearcertain goods (forinstance, cultural, historical, archaeological,
andother valuables).
A.Q. 356. Regarding Russia 'sanswer toquestion 308:
IfRussia doesnotcollect statistics onthepercentage ofRussia 'strade, import and
export accounted forbyState-owned -orprivate -enterprises, howdoesRussia monitor
theprogress inprivatization ofState-owned enterprises? Please provide information
onthestateofprivatization inRussia aswellasthelevelofactivities bytheprivatized
andState-owned enterprises.
Answer 356. IntheviewoftheRussian government, statistics onthepercentage ofRussia 'sforeign
tradeaccounted forbyState-owned orprivate enterprises arenotpertinent withrespect
tothecurrent situation ofprivatization inRussia. Forinformation concerning thelevel
ofactivities bytheprivatized andState-owned enterprises, seetheanswer toA.Q. 15,
22,49,52,354and360.
A.Q. 432. Question 360-Please listthecountries concerned ineachcase.
Answer 432. Free-tradeagreementshavebeenconcludedwithAzerbaijan,Armenia,Belarus,Georgia,
Kazakhstan, Moldova, Tadjikistan, Turkmenistan, Uzbekistan andUkraine.
Customs union agreements havebeenconcluded withBelarus andKazakhstan.
TheAgreement onborder cooperation inquestion (pertaining tosixregions onthe
Russian-Ukrainian border) hasbeenconcluded onlywithUkraine.