Voluntary Report - public distribution

**Date:** 1/5/2004

**GAIN Report Number:** RS4002

RS4002

**Russian Federation**

**Trade Policy Monitoring**

**New Customs Duties on Sugar Containing Products**

**2004**

**Approved by:**

![](media/image1.wmf)Allan Mustard

U.S. Embassy, Russia

**Prepared by:**

Mark Petry and Mikhail Maximenko

**Report Highlights:**

According to new government resolutions, changes have been introduced to
customs duties on sugar containing products for 2004. For the first
time, the resolutions will link many tariffs to market prices (as
defined by the monthly average of the New York Mercantile Exchange
trading price) in an effort to increase the stability of the Russian
sugar market. These resolutions mark a continuing effort by the Russian
Government to control the large flow of sugar imports while
simultaneously spur local sugar beet production.

Includes PSD Changes: No

Includes Trade Matrix: No

Unscheduled Report

Moscow \[RS1\]

\[RS\]

### RESOLUTION OF THE GOVERNMENT OF THE RUSSIAN FEDERATION ON TARIFF REGULATION OF RAW SUGAR AND WHITE SUGAR IMPORTS IN 2004, No. 720 OF NOVEMBER 29, 2003

The Russian Federation, the Government of the Russian Federation
resolves:

1\. To make the following changes to the Customs Tariff of the Russian
Federation, approved by resolution of the Government of the Russian
Federation of November 30, 2001, No. 830 "On the Customs Tariff of the
Russian Federation and Commodity Nomenclature Applied in Conducting
Foreign Economic Activities" (Collection of the Legislation of the
Russian Federation, 2001, No. 50, Article 4735; 2003, No. 29, Article
2967):

a\) Exclude from the Commodity Nomenclature of Foreign Economic
Activities of the Russian Federation sub-subpositions in accordance with
Appendix No. 1;

> b\) Include in the Commodity Nomenclature of Foreign Economic
> Activities of the Russian Federation sub-subpositions in accordance
> with Appendix No. 2;
>
> c\) Approve the accompanying import customs duties on raw sugar and
> white sugar.

2\. For the Ministry of Economic Development and Trade to ensure
monitoring of raw sugar prices on the New York Mercantile Exchange in
order to determine the average monthly price. Establish that the average
monthly price is calculated monthly as the average arithmetic price for
raw sugar on the New York Mercantile Exchange for the current contract
for all trading days (at close of trading).

3\. For the Ministry of Economic Development and Trade of the Russian
Federation to monthly submit to the State Customs Committee of the
Russian Federation, by the 15^th^ of the month, data on the average
monthly price for raw sugar on the New York Mercantile Exchange in the
preceding month, and publish them in the mass media.

4\. For the State Customs Committee of the Russian Federation, in
customs processing of goods indicated in Appendix No. 2 to the present
resolution that are imported in accordance with the customs regime for
domestic consumption, to exact import customs duties based on the data
provided by the Ministry of Economic Development and Trade of the
Russian Federation on the average monthly price for raw sugar from the
first date of the month following the month in which these data were
provided.

5\. The present resolution enters into force on January 1, 2004, with
the exception of points 2 and 3, which enter into force 15 days from its
official publication.

Prime Minister Of the Russian Federation

M. Kasyanov

Annex 1

#### Sub-subpositions subject to exclusion from the Commodity Classification (TN VED) of Russian foreign trade goods

  --------------- ------------------------------- ------------------------
  **Code TN VED** **Position name**               **Supplemental unit
                                                  measure**

  1701 11 100 1   **- - - - from January 1 to     **\_**
                  June 30**                       

  1701 11 100 9   **- - - - from July 1 to        **\_**
                  December 31**                   

  1701 11 900 1   **- - - - from January 1 to     **\_**
                  June 30**                       

  1701 11 900 9   **- - - - from July 1 to        **\_**
                  December 31**                   

  1701 91 000 1   **- - - - from January 1 to     **\_**
                  June 30**                       

  1701 91 000 9   **- - - - from July 1 to        **\_**
                  December 31**                   
  --------------- ------------------------------- ------------------------

Annex 2

#### Sub-subpositions subject to inclusion from the Commodity Classification (TN VED) of Russian foreign trade goods

  ------------- ------------------------------------- --------------------
  **Code TN     **Position name**                     **Supplemental unit
  VED**                                               measure**

  1701 11 100 1 **- - - - at average monthly price no **\_**
                more than US\$99.21 per ton on New    
                York Mercantile Exchange**            

  1701 11 100 2 **- - - - at average monthly price no **\_**
                less than US\$99.22 per ton, but no   
                more than US\$112.44 per ton on New   
                York Mercantile Exchange**            

  1701 11 100 3 **- - - - at average monthly price no **\_**
                less than US\$99.22 per ton, but no   
                more than US\$112.44 per ton on New   
                York Mercantile Exchange**            

  1701 11 100 4 **- - - - at average monthly price no **\_**
                less than US\$125.67 per ton, but no  
                more than US\$141.10 per ton on New   
                York Mercantile Exchange**            

  1701 11 100 5 **- - - - at average monthly price no **\_**
                less than US\$141.11 per ton, but no  
                more than US\$154.32 per ton on New   
                York Mercantile Exchange**            

  1701 11 100 6 **- - - - at average monthly price no **\_**
                less than US\$154.33 per ton, but no  
                more than US\$167.55 per ton on New   
                York Mercantile Exchange**            

  1701 11 100 7 **- - - - at average monthly price no **\_**
                less than US\$167.56 per ton, but no  
                more than US\$182.98 per ton on New   
                York Mercantile Exchange**            

  1701 11 100 8 **- - - - at average monthly price no **\_**
                less than US\$182.99 per ton, but no  
                more than US\$198.42 per ton on New   
                York Mercantile Exchange**            

  1701 11 100 9 **- - - - at average monthly price no **\_**
                less than US\$198.43 per ton on New   
                York Mercantile Exchange**            

  1701 11 900 1 **- - - - at average monthly price no **\_**
                less than US\$99.21 per ton on New    
                York Mercantile Exchange**            

  1701 11 900 2 **- - - - at average monthly price no **\_**
                less than US\$99.22 per ton, but no   
                more than US\$112.44 per ton on New   
                York Mercantile Exchange**            

  1701 11 900 3 **- - - - at average monthly price no **\_**
                less than US\$112.45 per ton, but no  
                more than US\$125.66 per ton on New   
                York Mercantile Exchange**            

  1701 11 900 4 **- - - - at average monthly price no **\_**
                less than US\$125.67 per ton, but no  
                more than US\$141.10 per ton on New   
                York Mercantile Exchange**            

  1701 11 900 5 **- - - - at average monthly price no **\_**
                less than US\$141.11 per ton, but no  
                more than US\$154.32 per ton on New   
                York Mercantile Exchange**            

  1701 11 900 6 **- - - - at average monthly price no **\_**
                less than US\$154.33 per ton, but no  
                more than US\$167.55 per ton on New   
                York Mercantile Exchange**            

  1701 11 900 7 **- - - - at average monthly price no **\_**
                less than US\$167.56 per ton, but no  
                more than US\$182.98 per ton on New   
                York Mercantile Exchange**            

  1701 11 900 8 **- - - - at average monthly price no **\_**
                less than US\$182.99 per ton, but no  
                more than US\$198.42 per ton on New   
                York Mercantile Exchange**            

  1701 11 900 9 **- - - - at average monthly price no **\_**
                less than US\$198.43 per ton on New   
                York Mercantile Exchange**            

  1701 91 000 1 **- - - - at average monthly price no **\_**
                less than US\$99.21 per ton on New    
                York Mercantile Exchange**            

  1701 91 000 2 **- - - - at average monthly price no **\_**
                less than US\$99.22 per ton, but no   
                more than US\$112.44 per ton on New   
                York Mercantile Exchange**            

  1701 91 000 3 **- - - - at average monthly price no **\_**
                less than US\$112.45 per ton, but no  
                more than US\$125.66 per ton on New   
                York Mercantile Exchange**            

  1701 91 000 4 **- - - - at average monthly price no **\_**
                less than US\$125.67 per ton, but no  
                more than US\$141.10 per ton on New   
                York Mercantile Exchange**            

  1701 91 000 5 **- - - - at average monthly price no **\_**
                less than US\$141.11 per ton, but no  
                more than US\$154.32 per ton on New   
                York Mercantile Exchange**            

  1701 91 000 6 **- - - - at average monthly price no **\_**
                less than US\$154.33 per ton, but no  
                more than US\$167.55 per ton on New   
                York Mercantile Exchange**            

  1701 91 000 7 **- - - - at average monthly price no **\_**
                less than US\$167.56 per ton, but no  
                more than US\$182.98 per ton on New   
                York Mercantile Exchange**            

  1701 91 000 8 **- - - - at average monthly price no **\_**
                less than US\$182.99 per ton, but no  
                more than US\$198.42 per ton on New   
                York Mercantile Exchange**            

  1701 91 000 9 **- - - - at average monthly price no **\_**
                less than US\$198.43 per ton on New   
                York Mercantile Exchange**            
  ------------- ------------------------------------- --------------------

#### Customs import duties

  ------------- ------------------------------------- --------------------
  **Code TN     **Position**                          **Rate (value in
  VED**                                               euros or dollars)**

  1701 11 100 1 **- - - - at average monthly price no **US\$270 per 1,000
                less than US\$99.21 per ton on New    kg**
                York Mercantile Exchange**            

  1701 11 100 2 **- - - - at average monthly price no **US\$250 per 1,000
                less than US\$99.22 per ton, but no   kg**
                more than US\$112.44 per ton on New   
                York Mercantile Exchange**            

  1701 11 100 3 **- - - - at average monthly price no **US\$235 per 1,000
                less than US\$112.45 per ton, but no  kg**
                more than US\$125.66 per ton on New   
                York Mercantile Exchange**            

  1701 11 100 4 **- - - - at average monthly price no **US\$221 per 1,000
                less than US\$125.67 per ton, but no  kg**
                more than US\$141.10 per ton on New   
                York Mercantile Exchange**            

  1701 11 100 5 **- - - - at average monthly price no **US\$206 per 1,000
                less than US\$141.11 per ton, but no  kg**
                more than US\$154.32 per ton on New   
                York Mercantile Exchange**            

  1701 11 100 6 **- - - - at average monthly price no **US\$194 per 1,000
                less than US\$154.33 per ton, but no  kg**
                more than US\$167.55 per ton on New   
                York Mercantile Exchange**            

  1701 11 100 7 **- - - - at average monthly price no **US\$180 per 1,000
                less than US\$167.56 per ton, but no  kg**
                more than US\$182.98 per ton on New   
                York Mercantile Exchange**            

  1701 11 100 8 **- - - - at average monthly price no **US\$164 per 1,000
                less than US\$182.99 per ton, but no  kg**
                more than US\$198.42 per ton on New   
                York Mercantile Exchange**            

  1701 11 100 9 **- - - - at average monthly price no **US\$140 per 1,000
                less than US\$198.43 per ton on New   kg**
                York Mercantile Exchange**            

  1701 11 900 1 **- - - - at average monthly price no **US\$270 per 1,000
                less than US\$99.21 per ton on New    kg**
                York Mercantile Exchange**            

  1701 11 900 2 **- - - - at average monthly price no **US\$250 per 1,000
                less than US\$99.22 per ton, but no   kg**
                more than US\$112.44 per ton on New   
                York Mercantile Exchange**            

  1701 11 900 3 **- - - - at average monthly price no **US\$235 per 1,000
                less than US\$112.45 per ton, but no  kg**
                more than US\$125.66 per ton on New   
                York Mercantile Exchange**            

  1701 11 900 4 **- - - - at average monthly price no **US\$221 per 1,000
                less than US\$125.67 per ton, but no  kg**
                more than US\$141.10 per ton on New   
                York Mercantile Exchange**            

  1701 11 900 5 **- - - - at average monthly price no **US\$206 per 1,000
                less than US\$141.11 per ton, but no  kg**
                more than US\$154.32 per ton on New   
                York Mercantile Exchange**            

  1701 11 900 6 **- - - - at average monthly price no **US\$194 per 1,000
                less than US\$154.33 per ton, but no  kg**
                more than US\$167.55 per ton on New   
                York Mercantile Exchange**            

  1701 11 900 7 **- - - - at average monthly price no **US\$180 per 1,000
                less than US\$167.56 per ton, but no  kg**
                more than US\$182.98 per ton on New   
                York Mercantile Exchange**            

  1701 11 900 8 **- - - - at average monthly price no **US\$164 per 1,000
                less than US\$182.99 per ton, but no  kg**
                more than US\$198.42 per ton on New   
                York Mercantile Exchange**            

  1701 11 900 9 **- - - - at average monthly price no **US\$140 per 1,000
                less than US\$198.43 per ton on New   kg**
                York Mercantile Exchange**            

  1701 12 100 1 **- - - - from January 1 to June 30** **US\$250 per 1,000
                                                      kg**

  1701 12 100 9 **- - - - from July 1 to December     **US\$270 per 1,000
                31**                                  kg**

  1701 12 900 1 **- - - - from January 1 to June 30** **US\$250 per 1,000
                                                      kg**

  1701 12 900 9 **- - - - from July 1 to December     **US\$270 per 1,000
                31**                                  kg**

  1701 91 000 1 **- - - - at average monthly price no **US\$270 per 1,000
                less than US\$99.21 per ton on New    kg**
                York Mercantile Exchange**            

  1701 91 000 2 **- - - - at average monthly price no **US\$250 per 1,000
                less than US\$99.22 per ton, but no   kg**
                more than US\$112.44 per ton on New   
                York Mercantile Exchange**            

  1701 91 000 3 **- - - - at average monthly price no **US\$235 per 1,000
                less than US\$112.45 per ton, but no  kg**
                more than US\$125.66 per ton on New   
                York Mercantile Exchange**            

  1701 91 000 4 **- - - - at average monthly price no **US\$221 per 1,000
                less than US\$125.67 per ton, but no  kg**
                more than US\$141.10 per ton on New   
                York Mercantile Exchange**            

  1701 91 000 5 **- - - - at average monthly price no **US\$206 per 1,000
                less than US\$141.11 per ton, but no  kg**
                more than US\$154.32 per ton on New   
                York Mercantile Exchange**            

  1701 91 000 6 **- - - - at average monthly price no **US\$194 per 1,000
                less than US\$154.33 per ton, but no  kg**
                more than US\$167.55 per ton on New   
                York Mercantile Exchange**            

  1701 91 000 7 **- - - - at average monthly price no **US\$180 per 1,000
                less than US\$167.56 per ton, but no  kg**
                more than US\$182.98 per ton on New   
                York Mercantile Exchange**            

  1701 91 000 8 **- - - - at average monthly price no **US\$164 per 1,000
                less than US\$182.99 per ton, but no  kg**
                more than US\$198.42 per ton on New   
                York Mercantile Exchange**            

  1701 91 000 9 **- - - - at average monthly price no **US\$140 per 1,000
                less than US\$198.43 per ton on New   kg**
                York Mercantile Exchange**            

  1701 99 100 1 **- - - - from January 1 to June 30** **US\$340 per 1,000
                                                      kg**

  1701 99 100 9 **- - - - from July 1 to December     **US\$340 per 1,000
                31**                                  kg**

  1701 99 900 1 **- - - - from January 1 to June 30** **US\$340 per 1,000
                                                      kg**

  1701 99 900 9 **- - - - from July 1 to December     **US\$340 per 1,000
                31**                                  kg**
  ------------- ------------------------------------- --------------------

Source: Interfax

**Additional Changes to Sugar Containing Products Tariff Codes**

Prime Minister Mikhail Kasyanov also approved new import duties of 0.23
euros per kilogram for a number of other products that contain sugar.
The new rates apply to artificial honey, syrups containing more than 50
percent sucrose in dry weight, chocolate and other cocoa products with
more than five percent sucrose and a number of other commodities. The
duty on these products was previously five percent of the customs value.

In determining the country of origin of raw sugar and white sugar
imports, the sugar content and its origin will play the key determining
factor. Mixing (including dilution with water, addition of flavorings,
cocoa or other substances) will not change the origin of products under
the 1702, 1704, 1806 or 2106 tariff codes.

According to the Government Resolution #686, dated November 13, 2003,
temporary custom duties were introduced on certain sugar containing
products. The Resolution came into force on December 18, 2003 and will
be valid for 9 months. The following table outlines the tariff changes
included in the resolution.

  ----------------------- ----------------------- -----------------------
  Tariff Code             Category                Custom duty as percent
                                                  of custom value,
                                                  Euro/kilo

  1702 20 900 0           \--other                0.23

  1702 90 600 0           \-- artificial honey,   0.23
                          whether or not mixed    
                          with natural honey      

  1702 90 710 0           \-\--containing 50      0.23
                          percent by weight or    
                          more of dry saccharose  

  1702 90 750 0           \-\-\--in powder        0.23
                          agglomerated or not     
                          agglomerated            

  1702 90 790 0           \-\-\--other            0.23

  1702 90 990 0           \--other                0.23

  1806 10 200 0           \-- containing 5        0.23
                          percent by weight but   
                          less than 65 percent by 
                          weight of more of       
                          saccharose (including   
                          invert sugar) or        
                          isoglucose              

  1806 10 300 0           \--containing 65        0.23
                          percent by weight or    
                          more but not less than  
                          80 percent of           
                          saccharose (including   
                          invert sugar) or        
                          isoglucose              

  1806 10 900 0           \--containing 80        0.23
                          percent by weight or    
                          more of saccharose      
                          (including invert       
                          sugar) or isoglucose    

  1806 20 950 0           \-\--other              0.23

  2106 90 590             \-\-\--other            0.23
  ----------------------- ----------------------- -----------------------

Source: Rossiyskaya Gazeta, November 18, 2003