RESTRICTEDWORLD TRADE
ORGANIZATIONWT/ACC/RUS/26
13 May 1998
(98-1907)
Working Party on the Accession
of the Russian FederationOriginal:  English
ACCESSION OF THE RUSSIAN FEDERATION
Information on the Subsidies System
in the Russian Federation
The Permanent Mission of the Russian Federation has submitted the following information on
the subsidies system in the Russian Federation, with the request that it be circulated to members of the
Working Party.
_______________WT/ACC/RUS/26
Page 2
EXPLANATORY NOTE
In accordance with Federal Law No. 29-FZ “On Federal Budget for 1997" dated
26 February 1997, the following forms of State support were provided for economic sectors, specific
enterprises and regions of the Russian Federation:
- direct transfers from the Federal Budget;
- budgetary loans;- deferred payments or instalment payments to the Federal Budget;
- investment tax credits;
- other forms of State support (including, mainly tax holiday periods for small business
enterprises);
- grants and subventions to regions.
The total amount of the financing for the above positions from the Federal Budget amounted
to 68,676.7 billion rubles (herein and further in 1997 prices, i.e. not denominated rubles), includingfor industry support - 19, 498.5 billion rubles and for the development of regions - 49,178.2 billion
rubles.  Comprehensive figures are provided in Table Nos. 1-3. In addition to the above as reference
data Appendix No. 1 provides the lists of federal special programmes stipulated in the 1997 Federal
Budget Law and federal programmes for the development of regions.  Financing of these programmes
was provided in the Federal Budget and these programmes contain elements which fall under theabove listed measures of State support. Such elements are reflected in Table Nos. 1-3.
Direct Transfers from the Federal Budget
The total amount of transfers from the federal budget pursuant to this type of support was
10,555.3 billion rubles. Most of these transfers were utilized for the support of the coal industry,
totalling 6,469.0 billion rubles in 1997 (61.3 per cent), the support of enterprises of other sectors offuel-energy sector (2,232.5 billion rubles) and for the conversion of defence industry (1,302.2 billion
rubles).
Non-repayable financing of the coal industry was performed in accordance with the
Regulations “On State Funding for Coal Industry Restructuring Activities” approved by Resolution of
the Government of the Russian Federation No. 598 dated 17 May 1996. The Regulations determinethe procedure for management and control of these funds. The Regulations call for the following
elements of State support:
- technical operations to abandon highly unprofitable and unpromising mines and open pit
operations;
- research and design support for coal industry restructuring;- activities for social protection of the employees to be released in connection with coal
industry restructuring;
- expenses to cover damages caused to the employees of the enterprises and open pits to be
abandoned;
- demolition of worn-out housing and construction of new housing;
- maintenance, re-engineering and modernization of mines and open pit operations;
- construction of new profitable mines with appropriate infrastructure;- selective support for coal producers which fail to cover their expenses through free market
prices for coal products;
- corporate expenses for the implementation of the industry-wide wage rate agreement;
- maintenance of social assets held in corporate balance sheets.
The outlays made from the Federal Budget towards these aims in 1997 are shown in Table
Nos. 1 and 2.WT/ACC/RUS/26
Page 3
The 1997 Budget also provided for compensation s to joint-stock companies of the energy and
power supply industries for the tariffs payable for electricity in the Far East. In practice, a total of
1,281.3 billion rubles was appropriated for these purposes.
In realization of Presidential Decree No. 8 of 10 January 1993 and Governmental Resolutions
No. 1325 of 23 December 1993, No. 235 of 7 March 1995 and No. 724 of 17 July 1995, enterprises
have been gradually released from the financial burden of having to support local social infrastructure.In 1997, 567.9 billion rubles were transferred to enterprises for these purposes as a partial
compensation for the corresponding expenses, including 130.5 for the coal industry and 437.4 for the
forest industry.
Also, direct government support was rendered in 1997 from the Federal Budget to a number
of other industries (see Table No.1).
Budgetary Loans for Enterprises and Organizations
In 1997 appropriations were planned and made out of the State budget in the form of
repayable loans (the names of the enterprises and the respective loan amounts are listed in Table
No.1). The amount of such budgetary loans totalled 2,898.1 billion rubles.
In particular, according to the Law "On the Fe deral Budget for 1997" (Article 22, Section 7)
appropriations for the wood industry were planned against a repayment security for the creation of
wood, raw materials and fuel reserves between seasons (209.5 billion rubles actually disbursed). Suchloans were appropriated to Russian enterprises of the wood industry subject to the absence of debts
for earlier loans pursuant to the approved list. The loans were based on interest, but such interest rates
were preferential (half of the refunding rate of the Central Bank of Russia). Loans were not
appropriated to enterprises with foreign investments.
Prior to 1997, loans for support of enterprises’ export production were made. In 1997 such
loans were made only to two enterprises in the total amount of 50.0 billion rubles on account of the
previous commitments undertaken by the State. However, starting from 1998, appropriation of loans
for support of export is not provided in the Federal Budget.
Deferred and Instalment Payments to the Federal Budget
In 1997, to stabilize the financial condition of certain industrial enterprises, deferrals were
granted with respect to payments to the Federal Budget at an interest rate of half of the Central Bank's
refunding rate in accordance with the legislation in force (see Table No.1).  The total amount of
deferred payment amounted to 5,749.1 billion rubles, including for the enterprises of the fuel-energy
sector - 5,706.6 billion rubles, or 99.3 per cent of the total amount.
Investment Tax Credits
Credits of this kind were granted in 1996 to a number of enterprises on a pay-back and
interest basis in accordance with the rulings of the Russian Federation Government and local
executive authorities; these credits are payable starting from 1999. No investment tax credits were
granted in 1997.
Other Forms of State Support
1. The participation of the Russian Federation Government in the creation of production
facilities.
In 1997 Yelabuga Automobile Plant were granted a government permit to sell
1.75 million tons of oil, and the proceeds from this sale (255.1 billion rubles) were channelled towardsWT/ACC/RUS/26
Page 4
the creation of new production facilities. Moreover, the company was partially acquitted from tax
payments to the amount of 40.9 billion rubles.
2. Tax holiday periods for small business enterprises.
Grants and Subventions to Regions
The Law "On the Federal Budget for 1997" provides for the following:
- transfers to separate geographical regions. Total actual disbursements amount to
36,904.4 billion rubles (see Table No.3);
- grants for closed administrative areas (in accordance with Federal Law No. 3297-1 “On
Closed Administrative Areas” dated 14 July 1992) totalling 3083.2 billion rubles;
- subventions to the city of Moscow for the implementation of purposes of the capital city of
the Russian Federation and to the city of Sochi as the resort city (see Table No.3). In 1997
2,400.0 billion rubles were actually appropriated to Moscow city; to the city of Sochi -
348.0 billion rubles.
Because a considerable part of the Russian territory is located in the Far North, in 1997 there
were appropriations to certain subjects of the Russian Federation for provision of products and fuel
amounting to 3,500.0 billion rubles (for details see Table No.3).
Appendices:
1. Table No.1. Industrial Subsidies by Sectors.
2. Table No.2. Consolidated Calculation of Financing for Coal Industry Restructuring
Activities.
3. Table No.3. Allocations to Regional Governments from the 1997 Federal Budget.
Appendix No.1. State Financing for Specific Federal Programmes:
- Table No.4. "List of Federal Special-Purpose Programmes Provided in the Federal
Law “On Federal Budget” of 1997;
- Table No. 5. List on Federal Programmes of Regional Development Included in the
1997 Federal Budget Financing List.WT/ACC/RUS/26
Page 5TABLE 1
List of Industrial Subsidies by Sectors
Item Authority
Responsible
for Subsidy
UseLaw Underlying the
SubsidyPurpose of the Subsidy Form of the Subsidy To Whom and How the
Subsidy Is Granted?Subsidy
Amount in
Billion Rubles
1. Pulp/paper and wood processing industry
1.1. Researchand development
project financingMinistry of
Science,
Ministry ofEconomics1997 Federal Budget Law,
No. 29-FZ of 26/2/97
(Annex 3, Section 47.3)Financing of research and
development projects
aimed to develop and
introduce new products,
reduce production costs,higher product quality and
stricter environmental
requirementsDirect transfer Specific wood industry
research entities and
engineering plants on a
tender basis and under
contracts according to theapproved list42.3
1.2. Creating
reserves of
wood, rawmaterials and
fuel between
seasonsMinistry of
Economics1997 Federal Budget Law,
No. 29-FZ of 26/2/97 (Art.
66, Section 7)Creation of reserves of
wood, raw materials and
fuel between seasonsBudgetary loan based
on interest at half of
the refunding rate ofthe Central Bank of
RussiaWood industry companies
(except for those with
foreign investments) subjectto the absence of debts for
earlier loans; pursuant to the
approved list209.5
1.3.
Reimbursement
for costs
associated with
maintenance ofsocial assetsMinistry of
Economics1997 Federal Budget Law,
No. 29-FZ of 26/2/97 (Art.
22, Section 7)
Decree of the President
No. 880 dated 14/8/97Reimbursement of costs
associated with
maintenance of socialassetsDirect transfer Wood industry companies 437.4
2. Mechanical engineering
2.1. Industrial
constructionMinistry of
Economics1997 Federal Budget Law,
No. 29-FZ of 26/2/97Support for industrial
construction and
implementation of the
federal investment
programmeDirect transfer Companies as per the list
approved by the
Government48.6WT/ACC/RUS/26
Page 6Item Authority
Responsible
for Subsidy
UseLaw Underlying the
SubsidyPurpose of the Subsidy Form of the Subsidy To Whom and How the
Subsidy Is Granted?Subsidy
Amount in
Billion Rubles
2.2. Loans to mechanical engineering companies, incl.:
JSC “Rostvertol” Ministry of
FinanceGovernment Resolution No.
53 of 20/1/96Support for export Budgetary loan based
on interest at half of
the refunding rate of
the Central Bank of
RussiaJSC “Rostvertol” 40.0
JSC Vladimir
Tractor PlantMinistry of
FinanceGovernment Resolution No.
53 of 20/1/96Support for farming
machinery exportsBudgetary loan based
on interest at half of
the refunding rate of
the Central Bank of
RussiaJSC Vladimir Tractor Plant 10.0
2.3. Deferred payment of taxes to the budget by mechanical engineering companies, incl.:
Support for
mechanicalengineering
companiesMinistry of
FinancePresidential Decree
No. 2270 "On CertainChanges in Taxation ..." of
22/12/93Improvement of financial
and business conditionsInterest at half of the
refunding rate of theCentral Bank of
RussiaCJSC “Armagus”,
Gus-Khrustalny, OJSC “20thBearing Plant”, Kursk,OJSC
“Schetmash”, Kursk15.9
2.4. Other types of State support for mechanical engineering companies, incl.:
JSC KaMAZ Ministry of
FinanceGovernment Decree
No. 139 "On State Support
for Restructuring andDevelopment of JSC
KaMAZ Enterprises" of
12/12/96 and Government
Order No. 349-r "On
Budgetary Loan ..." of
13/3/96Stabilization of the
operations of JSC KaMAZBudgetary loans and
restructuring of debts
based on interest at
the rate LIBOR + 0.5JSC KaMAZ 1280.0
Production
Association
"YelabugaAutomobile
Plant" (YelAZ)Ministry of
Finance,
Ministry of
EconomicsPresidential Decree No. 450
"On State Support for PA
YelAZ ..." of 1/4/96,Governmental Resolution
No. 579 dated 14/5/96Financing of activities Government
participation in
creation of productionfacilities and
organization of
production of
passenger carsProduction Association
"Yelabuga Automobile Plant"
(YelAZ)255.1WT/ACC/RUS/26
Page 7Item Authority
Responsible
for Subsidy
UseLaw Underlying the
SubsidyPurpose of the Subsidy Form of the Subsidy To Whom and How the
Subsidy Is Granted?Subsidy
Amount in
Billion Rubles
2.5.  Tax privileges for mechanical engineering companies, incl.:
ProductionAssociation
"Yelabuga
AutomobilePlant"Ministry of
Finance,
Ministry of
EconomicsPresidential Decree
No. 450 "On State Support
for PA YelAZ ..." of
1/4/96, GovernmentalResolution No. 579 dated14/5/96Financing of activities Government
participation in
creation of production
facilities and
organization of
production of
passenger carsProduction Association
"Yelabuga Automobile Plant"40.9
3. Textile and light industry
Support for the
industryMinistry of
Economics,
Ministry of
Finance1997 Federal Budget Law,
No. 29-FZ of 26/2/97,Article 66Support for the purchase of
raw materials and suppliesBudgetary loans based
on interest at half of
the refunding rate of
the Central Bank of
RussiaLight industry companies 264.7
4. Chemical and petrochemical industry
4.1. Support for
the industryMinistry of
Finance,
Federal
BankruptcyAgency1997 Federal Budget Law,
No. 29-FZ of 26/2/97 Support for the purchase of
raw materials and energy
resources for ethyl acetateproductionBudgetary loans based
on interest at half of
the refunding rate of
the Central Bank of
RussiaLLC Karbokhim and LLC
Moloma Wood Chemical
Plant4.5
4.2. OJSC
“Moscow Tyre
Plant”Ministry of
FinanceDecision of the Ministry
of Finance No. 06-03-01
dated 5/12/97Financial rehabilitation
arising out fireDeferred payments
based on interest at
half of the refunding
rate of the Central
Bank of RussiaOJSC “Moscow Tire Plant” 4.9
4.3. State support
for the chemical
and
petro-chemicalindustryMinistry of
Economics1997 Federal Budget Law,
No. 29-FZ of 26/2/97Support for the production
and sales of liquefied gasfor domestic needsDirect transfer JSC Novo-kuibyshevsk
Petro-chemical Plant, JSC
Tobolsk Petro-chemical
Plant21.3WT/ACC/RUS/26
Page 8Item Authority
Responsible
for Subsidy
UseLaw Underlying the
SubsidyPurpose of the Subsidy Form of the Subsidy To Whom and How the
Subsidy Is Granted?Subsidy
Amount in
Billion Rubles
5. Metallurgical industry
Support for
metallurgyenterprisesMinistry of
Finance,Ministry of
EconomicsDecision of Ministry of
Finance No. 06-04-09/22dated 12/5/97To stabilize financial
conditionBudgetary loans based
on interest at half of therefunding rate of the
Central Bank of RussiaJSC “Tulachermet” 21.7
6. Fuel and energy sector
6.1 Support for the
gas industryMinistry of
Fuel and
Energy,executiveauthorities1997 Federal Budget Law,
No. 29-FZ of 26/2/97Financial support for the
construction of the
Nyuksenitsa-Arkhangelskgas pipeline,financial support for theconstruction of the offset of agas pipeline in the town of
Kalyazin, in Rostov Region,
in the town of Tuchkovo.Direct transfer Russian JSC (RAO)
“Gazprom”
JSC “Rosgazifikatsiya”47.3
6.2. Support for
the oil industryMinistry of
Fuel and
Energy1997 Federal Budget Law,
No. 29-FZ of 26/2/97Compensation of losses
arising out of the production
and sales of the liquefied gasDirect transfer Oil enterprises 185.2
6.3. Support for
the electro- energy
industryMinistry of
Fuel and
Energy1997 Federal Budget Law,
No. 29-FZ of 26/2/97,
Governmental Resolution
No. 927 of 24/7/97To secure provision of fuel
for the autumn and winter
seasonBudgetary loan based
on interest at half of the
refunding rate of the
Central Bank of RussiaEnergy enterprises 1,089.4
6.4. Support for
the electro- energy
industryMinistry of
Fuel and
Energy1997 Federal Budget Law,
No. 29-FZ of 26/2/97Coverage of debts arising out
of previous loansDirect transfer Heat and powers supplying
enterprises2,000.00
6.5. Support for
the fuel and energy
sectorMinistry of
Fuel and
Energy,executiveauthorities1997 Federal Budget Law,
No. 29-FZ of 26/2/97,
Governmental Order No.1032-r of 24/7/97Deferred tax payments Deferred tax payments
based on interest at half
of the Central Bankrefunding rateEnterprises of fuel and energy
sector5,706.6WT/ACC/RUS/26
Page 9Item Authority
Responsible
for Subsidy
UseLaw Underlying the
SubsidyPurpose of the Subsidy Form of the Subsidy To Whom and How the
Subsidy Is Granted?Subsidy
Amount in
Billion Rubles
6.6. Restructuring
of the coal
industryMinistry of
Fuel and
Energy,Subjects of
the Federation1997 Federal Budget Law,
No. 29-FZ of 26/2/97Liquidation of the most
unprofitable mines,
reconstruction and buildingof new mines, social
support for the populationDirect transfer Mines and pits, executive
bodies of the subjects of the
Federation 6469.0
9. Defence industry
Conversion Ministry of
Economics1997 Federal Budget Law,
No. 29-FZ of 26/2/97Re-orientation and
modernization of
disengaged industrial
facilitiesDirect transfer to
research and
development projectsScientific enterprises of the
defence industry1,302.2
10. Folk arts and craft industry
Support Ministry of
Finance1997 Federal Budget Law,
No. 29-FZ of 26/2/97Support for folk arts and
craftsDirect transfer Folk craft and folk art
enterprises2.0
TOTAL:  19,498,5 billion rublesWT/ACC/RUS/26
Page 10TABLE 2
Consolidated Calculation of Financing for Coal Industry Restructuring Activities in 1997
(billion rubles at 1997 levels)
No.Lines of Financing for Coal Industry Restructuring
(To the extent of funds allocatable to coal industry organizations and local authorities of mining cities and settlements)1997
(actual)
TOTAL STATE SUPPORT FUNDS
including along the following lines:6,468.98
1 Technical operations to abandon highly unprofitable and non-promising coal mines and open pits 446.18
2 Research and development support for coal industry restructuring 129.58
3 Activities aimed at social protection of employees to be released in connection with coal industry restructuring, their family
members, retirees and disabled persons who have worked in coal mining1,672.64
4 Expenses to compensate employees of mines and open pits to be abandoned for damage caused due to industrial necessity 197.65
5 Operations to demolish worn-out and construct new housing in mining cities and settlements 41.67
6 Maintenance, re-engineering and modernization of operating mines and open pits in order to establish profitable coal enterpris es 1,027.64
7 Construction of new profitable coal mines and open pits with appropriate industrial infrastructure 1,039.92
8 Selective support for coal producers which do not cover their expenses through free prices for coal products 1,162.32
9 Expenses of coal industry and mine construction enterprises and organizations to implement the industry rate agreement 620.88
10 Maintenance of social assets and housing stock held in the balance sheets of coal industry enterprises and organizations befo re their
transfer to local governments130.5WT/ACC/RUS/26
Page 11TABLE 3
Allocations To Regional Governments From The 1997 Federal Budget
(billion rubles)
TransfersAllocations to Federal
Regional ProgrammesClosed Administrative
AreasNorth Subventions Total
NORTHERN AREA
Arkhangelsk Region 259.3 55.1 79.7 394.1
Nenets Autonomous District 105.2 44 149.2
Vologda Region 12.2 12.2
Murmansk Region 205.5 903.4 14.7 1,123.6
Republic of Karelia 331.4 5.7 337.1
Komi Republic 143.4 87.8 30 261.2
NORTHWEST AREA
City of St. Petersburg 228.3 58.2 286.5
Leningrad Region 206.2 206.2
Novgorod Region 388.8 388.8
Pskov Region 376.9 38 414.9
CENTRAL AREA
Bryansk Region 240.7 240.7
Vladimir Region 401.4 401.4
Ivanovo Region 662.4 37.5 699.9
Tver Region 341.0 48.9 389.9
Kaluga Region 386.1 386.1
Kostroma Region 492.5 492.5
City of Moscow 0.0 2,400 2,400.0
Moscow Region 770.9 137.9 908.8
Orel Region 602.1 602.1
Ryazan Region 253.2 253.2WT/ACC/RUS/26
Page 12TransfersAllocations to Federal
Regional ProgrammesClosed Administrative
AreasNorth Subventions Total
Smolensk Region 241.5 241.5
Tula Region 251.4 10 261.4
Yaroslavl Region 181.1 181.1
VOLGA-VYATKA AREA
Nizhny Novgorod Region 274.4 145.99 420.4
Kirov Region 641.7 5.9 647.6
Republic of Mari-El 411.3 411.3
Republic of Mordovia 573.2 84 657.2
Chuvash Republic 464.9 464.9
CENTRAL CHERNOZEM AREA
Belgorod Region 71.6 71.6
Voronezh Region 602.4 602.4
Kursk Region 381.8 381.8
Lipetsk Region 0.0 0.0
Tambov Region 416.3 416.3
VOLGA AREA
Astrakhan Region 557.3 34.5 591.8
Volgograd Region 217.5 217.5
Samara Region 0.0 1 1.0
Penza Region 467.4 141.8 609.2
Saratov Region 718.8 15.8 734.6
Ulyanovsk Region 292.2 292.2
Republic of Kalmykia 400.3 17 417.3
Republic of Tatarstan 0.0 0.0WT/ACC/RUS/26
Page 13TransfersAllocations to Federal
Regional ProgrammesClosed Administrative
AreasNorth Subventions Total
NORTH CAUCASIAN AREA
City of Sochi 0.0 348 348.0
Krasnodar Territory 1,323.8 1,323.8
Republic of Adygeya 448.9 13 461.9
Stavropol Territory 842.4 11.1 853.5
Karachai-Cherkess Republic 246.0 246.0
Rostov Region 1,008.6 1,008.6
Republic of Dagestan 1,378.3 150 1,528.3
Kabardino-Balkar Republic 540.2 220.5 760.7
Republic of North Ossetian 404.5 78 482.5
Ingush Republic 207.6 294.3 504.9
Chechen Republic 88.2 88.2
URAL AREA
Kurgan Region 401.2 401.2
Orenburg Region 332.5 21.9 354.4
Perm Region 147.6 23.3 170.9
Komi-Permyak Autonomous District 97.6 25.2 8.5 131.3
Sverdlovsk Region 0.0 167.98 168.0
Chelyabinsk Region 225.2 424.5 649.7
Republic of Bashkortostan 0.0 80.9 80.9
Udmurt Republic 564.2 564.2
WESTERN SIBERIAN AREA
Altai Territory 1,838.8 26 1,864.8
Republic of Altai 220.2 15 13 248.2
Kemerovo Region 970.1 970.1
Novosibirsk Region 648.6 648.6WT/ACC/RUS/26
Page 14TransfersAllocations to Federal
Regional ProgrammesClosed Administrative
AreasNorth Subventions Total
Omsk Region 422.7 422.7
Tomsk Region 373.9 8 40 421.9
Tyumen Region 586.3 1 587.3
Khanty-Mansi Autonomous District 0.0 9.3 9.3
Yamalo-Nenets Autonom ous District 0.0 14.2 14.2
EASTERN SIBERIAN AREA
Krasnoyarsk Territory 0.0 416.9 261.4 678.3
Taimyr Autonomous District 91.8 291 382.8
Evenk Autonomous District 137.1 70 207.1
Republic of Khakassia 124.6 124.6
Irkutsk Region 155.1 24.7  65 244.8
Ust-Ordynsky Buryat Autonomous
District166.1 166.1
Chita Region 446.6 8 10.5 465.1
Aginskye Buryat Autonomous District 81.3 81.3
Republic of Buryatia 843.3 10 20 873.3
Republic of Tuva 366.7 95 38.2 499.9
FAR EASTERN AREA
Primorsky Territory 1,173.8 248.8 3.1 1,425.7
Khabarovsk Territory 866.6 129.6 996.2
Jewish Autonomous Region 255.7 255.7
Amur Region 1,085.9 3.2 7.5 1,096.6
Kamchatka Region 348.6 36.4 172.4 150 707.4
Koryak Autonomous District 168.5 245.6 414.1
Magadan Region 619.3 260 879.3
Chukotka Autonomous District 539.2 416.8 956.0WT/ACC/RUS/26
Page 15TransfersAllocations to Federal
Regional ProgrammesClosed Administrative
AreasNorth Subventions Total
Sakhalin Region 606.0 47.4 150.4 803.8
Republic of Sakha (Yakutia) 1,714.0 1,120.8 2,834.8
WESTERN AREA
Kaliningrad Region 224.3 224.3
Nakhodka 35.3 35.3
Thin Peoples of the North 5 5.0
Payment of debts 258.9 258.9
Compensation of electrical energy
tariffs in the Far East1,281.3 1,281.3
TOTAL 36,904.4 2,942.6 3,083.17 3,500 2,748 49,178.2WT/ACC/RUS/26
Page 16
Appendix 1
State Financing for Specific Federal Programmes
Federal special-purpose programmes, including regional ones, are developed, approved and
implemented as prescribed by Resolution of the Government of the Russian Federation No. 594 dated
26 June 1995.
The list of federal special-purpose programmes to be financed out of the Federal Budget must
be approved by the law concerning the Federal Budget for each subsequent year.  The Federal Budget
provides for special appropriations to the Stat e customers of such programmes for the funding of
capital investments, research and development costs and other current expenses for a subsequent year.
The list of federal regional programmes financed out of the State budget is attached hereto as
Table No.5. Table No.4 offers the list of federal special-purpose programmes provided in the 1997
Federal Law “On Federal Budget”. However, it sh ould be noted that financing of these programmes
has almost not been made.
The general purpose of all federal regional development programmes and other special
programmes developed and approved by the Governme nt to date, has been to establish and implement
a package of measures ensuring economic recovery and creation of an efficient regional economy, as
well as settlement of social problems.
The federal regional development programmes are also oriented to achieving the overall
objectives of the regional socio-economic policy of the State which are set forth in the Guidelines for
Regional Policies in the Russian Federation approved by Decree of the President of the Russian
Federation No. 803 dated 3 June 1996.
These objectives include:
- strengthening the economic foundations of Russia, ensuring national integrity and stability;- promoting the development and enhancement of economic reform, creation of a diversified
economy in all regions, development of regional and national commodity, labour and capital
markets, institutional and market infrastructure;
- reducing regional disparities in social and economic development, progressive creation of
conditions for strengthening regional public welfare, and streamlining of regional resettlementprogrammes;
- achieving increased levels of specialization and diversification of regional economies,
increasing the viability of regional economies;
- providing State support for depressed, underdeveloped, environmentally damaged areas and
other areas with complex demographic and migration-related problems; and
- developing and implementing comprehensive policies for regions with difficult business
conditions which require special measures, such as the Arctic, Far Eastern, and frontier areas.
The funds allocated for the implementation of federal programmes for development of
regions are provided in the form of financing capital investments and research and development out ofWT/ACC/RUS/26
Page 17
the Federal Budget, principally in the development and modernization of transport and energy
infrastructure, environmental protection, protection and restoration of cultural monuments,
elimination of consequences of natural calamities, development of housing and social infrastructure.WT/ACC/RUS/26
Page 18TABLE 4
List Of Federal Special-Purpose Programmes Provided  in the Federal Law “On Federal Budget” of 1997
(billion rubles at 1997 levels)
No. Name of Programme/Sub-Programme State
InvestmentResearch and
Development
ExpensesOther Needs Total
HOUSING DEVELOPMENT
1. "Housing" programme
State customer: Russian Federation Govern ment, Ministry of Construction, State
Committee for Northern Territories, Ministry of Emergencies, Ministry of
Defence, State Committee for Youth Affairs, other federal executive authorities,executive authorities of Russian subjects6,525.34 1.90 6,527.24
including:
- Management Centre of the Military Space Forces (Krasnoznamensk) 106.00 106.00
- housing development pursuant to Edicts of the Russian Federation 
President and Decrees of the Russian Federation Government150.50 150.50
as part of the "Housing" programme:
1.1 Programme: "Housing Provision for Servic emen, Individuals Dismissed or Retired
from Military Service, Employees of Internal Affairs Authorities and Their FamilyMembers in 1996-1997"3,985.80 3,985.80
including:
- relocation from Leninsk (Baikonur) 200.00 200.00
in addition:
- under the defence expenditure budget 4,057.50 4,057.50
State customer: Ministry of Defence, other federal executive authorities, executive
authorities of Russian Federation subjects, Ministry of Construction (supervision)
1.2 Presidential programme: "Housing Development in the Russian Federation for
Individuals Moving from Arctic and Equivalent Areas" (1993-2005)
State customer: State Committee for Northern Territories224.00 224.00WT/ACC/RUS/26
Page 19No. Name of Programme/Sub-Programme State
InvestmentResearch and
Development
ExpensesOther Needs Total
1.3 Programme: "Housing Provision for Participants in the Liquidation of the
Chernobyl Accident Consequences" ("Housing for Liquidators") (1995-1997)State customer: Ministry of Emergencies200.00 200.00
1.4 "Own Home" programme (1996-2000) 965.00 1.90 967.10
including:
- for individuals moving from Far North and equivalent areas
State customer: Ministry of Constructi on (coordinator),  State Committee for the
Wood Industry,  State Committee for Northern Territories
2. Programme: “Defence Industr y Conversion in 1995-1997" 931.80 2,025.50 2,957.30
including:
- conversion of the Russian Space Agency's enterprises 51.80 82.09 133.89
- conversion loan 2,412.50 2,412.50
State customer: State Conversion Fund (coordinator),  Ministry of the Defence
Industry,  Ministry of Transport,  Ministry of Fuel and Energy,  Ministry of
Communications,  Ministry of Nuclear Energy,  Ministry of Labour, Russian Space
Agency
3. Presidential programme: "Development of Russian Civil Aircraft" (for the period
ending 2000)
State customer:  Ministry of the Defence Industry843.15 42.00 885.15
4. Presidential programme: "Russian Shipyards" (1996-2000)
State customer:  Ministry of the Defence Industry217.80 217.80
5. Presidential programme: "Development of Russian Electronics" (1994-2000)
State customer:  Ministry of the Defence Industry361.95 361.95
6. "Fuel and Energy" programme (1996-2000)
State customer:  Ministry of Fuel and En ergy (coordinator),  Ministry of Nuclear
Energy,  State Committee for Science a nd Technology,  Ministry of Industry1,260.00 143.50 0.80 1,404.30
in addition:
- out of the proceeds of coal industry subsidies 2,402.00 2,402.00WT/ACC/RUS/26
Page 20No. Name of Programme/Sub-Programme State
InvestmentResearch and
Development
ExpensesOther Needs Total
including:
- Beringovskaya Mine (Chukotka Autonomous District) 25.00 25.00
- Solntsevsky Open Pit (Sakhalin Region) 30.00 30.00
- Mugunsky Open Pit (Irkutsk Region) 35.00 35.00
- Yerkhovetsky Open Pit (Amur Region) 10.00 10.00
7. Programme: "Energy-Saving Electrical Equipment" (1996-1997)
State customer:  Ministry of Industry9.50 1.58 11.08
8. Presidential programme: "Gasification of Russia" (1996-2000)
State customer:  Ministry of Fuel and Energy,  Ministry of Agriculture and
Provisions115.00 115.00
including:
8.1 Presidential programme: "Gasification Development in the Central Chernozem
Area of the Russian Federation in 1996-2000"20.00 20.00
State customer:  Ministry of Fuel and Energy,  Ministry of Agriculture and
Provisions
9. "Communications" programme 668.5 190.48 1,365.88 2,224.86
including:
9.1 Programme: "Revival of the Russian Merchant Marine" (1993-2000)
State customer:  Ministry of Transport241.00 14.68 255.68
9.2 Programme: "Russian Inland Waterways" (1996-2000)
State customer:  Ministry of Transport330.00 668.80 998.80
9.3 Programme: "Railway Passenger Transportation Development and Quality
Improvement" ("Vehicle Development, Including Locomotive Engineering")(1994-2000)State customer:  Ministry of Railways,  Ministry of Industry27.80 27.80WT/ACC/RUS/26
Page 21No. Name of Programme/Sub-Programme State
InvestmentResearch and
Development
ExpensesOther Needs Total
9.4 Programme: "Development of Urban Bus, Trolley Bus and Tram Manufacture in
the Russian Federation during 1993-2000" ("Passenger Vehicle Development")
State customer:  Ministry of Industry,  Mi nistry of Transport,  Ministry of the
Defence Industry24.50 3.00 27.50
9.5 Presidential programme: "Development of Communications, Television and Radio
Broadcasting Equipment" (1997-2005)State customer:  Ministry of the Defence Industry170.00 170.00
9.6 Presidential programme: "Establishment and Development of a Special-Purpose
Information and Telecommunications System in the Interests of GovernmentalAuthorities" (ITCS programme, Go vernmental Communications) (1996-2000)2.50 2.50
financed from the  Customs System Development Fund 674.50 674.50
9.7 Programme: "Traffic Safety Enhancement in Russia" (1996-1998)
State customer:  Ministry of Transport,  Ministry of Internal Affairs2.80 22.58 25.38
9.8 Programme: "Development of Postal Communications in the Russian Federation"
(1994-2005)State customer:  Ministry of Communications42.70 42.70
10. Programme: "State Protection of Machine Tool Manufacture" (1993-1998)
State customer:  Ministry of Industry7.30 3.98 11.28
11. Programme: "Retooling and Devel opment of Russian Metallurgy" (1993-2000)
State customer:  Ministry of Industry162.00 162.00
12. Programme: "Increasing the Competitiveness of Russian Products" 216.00 9.87 15.00 240.87
including:
12.1 Innovation programme: "Development and Establishment of Competitive
Commercial Chemical Production to Im plement Economic Development Priorities
and Reduce Man-Induced Impact on the Environment"State customer:  Ministry of Industry185.00 4.23 189.23
12.2 Innovation programme: "Certification and Metrology" (1992-1998)
State customer:  State Committee for Standards,  Ministry of Industry31.00 5.64 15.00 51.64WT/ACC/RUS/26
Page 22No. Name of Programme/Sub-Programme State
InvestmentResearch and
Development
ExpensesOther Needs Total
13. Innovation programme: "Russian Arctic Equipment" (1993-1997)
State customer:  Ministry of Industry0.53 0.53
14. Programme: "Development of Commercial Biotechnology" (1996-2000)
State customer:  Ministry of Industry3.50 6.00 9.50
15. Programme: "Russian Forest Preservation" 210.50 76.35 1,449.9 1,736.75
including:
15.1 Programme: "Fire Protection of Forests" (1993-1997)
State customer: Russian Forestry Agency100.00 1.88 638.8 740.68
15.2 Programme:  "Russian Forests" (1996-2000)
State customer: Russian Forestry Agency20.00 4.47 811.10 835.57
15.3 Programme: “Wood Industry Development in the Russian Federation" (1996-2000)
State customer:  State Committee for the Wood Industry90.50 70.00 160.50
16. Programme: "Stabilization and Development of Agro-industrial Production in the
Russian Federation during 1996-2000"State customer:  Ministry of Agriculture and Provisions73.30 90.45 3,215.5 3,379.25
including:
16.1 Programme: "Mechanical Engineering for the Russian Agroindustrial Sector"
(1993-1998)State customer:  Ministry of Agricultur e and Provisions,  Ministry of Industry18.30 76.65 94.95
16.2 Programme: "Development of an Au tomated State Land Registry System"
(1996-2000)
State customer:  State Land Committee15.00 616.2 631.20
16.3 Programme:  "Russian Hops" (1996-2000)
State customer:  Ministry of Agriculture and Provisions5.00 5.00
16.4 Programme: "Enhancing the Fertility of Russian Soils" ("Fertility") (1996-2000)
State customer:  Ministry of Agriculture and Provisions13.80 2,305.7 2,319.50WT/ACC/RUS/26
Page 23No. Name of Programme/Sub-Programme State
InvestmentResearch and
Development
ExpensesOther Needs Total
16.5 Programme: "Fish Industry Development in the Russian Federation" ("Fish") (for
the period ending 2000)State customer:  State Fishing Committee35.00 293.6 328.6
17. Programme: "Advanced Mapping and Geodetic Technologies in the Russian
Federation" (1994-2000)State customer: Russian Mapping Service8.70 5.33 39.90 53.93
18. Programme: "Russian Engineering Netw ork of Technical Novelties" ("Russian
Engineering Network") (1996-1998)
State customer:  Ministry of Economics0.90 0.90
19. Presidential programme "National Technology Base"
State customer:  Ministry of the Defence Industry21.00 21.00
20. Presidential programme: "Development and Application of Dual-Use Technologies
in Special Chemistry"State customer:  Ministry of the Defence Industry20.00 20.00
21. State Programme of State Secret Protection in the Russian Federation for
1996-1997
State customer: State Technical Commission of the  President10.00 10.00
22. Programme: "State Support for Local Governments" 50.00 50.00
23 Programme: "Preservation and Developm ent of St. Petersburg's Historical City
Centre"
State customer:  Ministry of Construc tion, St. Petersburg City Administration64.00 64.00
24. Programme: "Social and Economic Development of Pskov Region during
1996-1998"State customer: Pskov Regional Administration94.00 94.00WT/ACC/RUS/26
Page 24TABLE 5
List of Federal Programmes of Regional Developmen t Included in the 1997 Federal Budget Financing List
(billion rubles in 1997 prices)
No. Programme Name Programme Approv al Decision Implementation PeriodFinancing From
the 1997 Federal
Budget
REGIONAL PROGRAMMES
1 "Social and economic development of the
Kuril Islands and Sakhalin Region"Government Decree No. 1297
dated 17/12/931993-1995 and until 2000 79.3
2 Presidential programme "Economic and
social development of the Far East and
Trans-Baikal Regions"Government Decree No. 480 dated
15/4/961996-2005 76.7
3 "Economic and social development of the
Republic of Mordovia"Government Decree No. 1257
dated 26/12/951996-2000 33.0
4 “Social and cultural development of Tver
Region (the Great Watershed Territories)”Resolution No. 2336-1 of the
Soviet of Nationalities of theSupreme Soviet dated 12/2/921993-2000 0.5
5 "Social and economic development, ethnic
and cultural revival of the Balkar people"Government Decree No. 374 dated
3/4/961996-2000 0.0
ENVIRONMENTAL PROGRAMMES
6. "State support for public natural reservations
and national parks"Government Decree No. 1032
dated 10/10/96until 2000 8.4
7. "Environmental rehabilitation of the Volga
river and its tributaries, restoration and
prevention of deterioration of naturalcomplexes in the Volga basin" ("the VolgaRevival")Government Decree No. 95 dated
2/2/96 (First-priority activities)1996-2010 (First-priority
activities for 1996-1998)26.2WT/ACC/RUS/26
Page 25No. Programme Name Programme Approv al Decision Implementation PeriodFinancing From
the 1997 Federal
Budget
8. "Development of the system of hydro
meteorological support for the economy ofthe Russian Federation"Government Decree No. 437 dated
3/5/941994-2000 34.6
9. “Environmental rehabilitation and human
health protection in Tula Region”Government Decree No. 732 dated
2/6/931993-1998 0.0
10. "Urgent measures to improve the
environmental, sanitary, epidemiological and
public health situation in the town of Bratsk,
Irkutsk Region" ("Bratsk Ecology")Government Decree No. 376 dated
23/4/941994-2000 0.0
11. "Flood protection of populated areas,
business facilities, agricultural and other
valuable lands in Primorsky Territory"Government Decree No. 340 dated
15/4/951995-2000 42.3
12. "Rehabilitation of the environmental and
public health in the town of Nizhny Tagil,Sverdlovsk Region”Government Decree No. 452,
6/5/951996-2000 1.6
13. "Protection and improvement of the
populated localities damaged by thedestructive impact of Krasnodar Reservoir"Presidential Edict No. 207 dated
10/2/93; Government DecreeNo. 81 dated 26/1/951993-2000 12.8
14. "Solving the social, economic and
environmental problems related to theCaspian water rise" ("the Caspian")Government Decree No. 328 dated
23/3/96 (First-priority activities)1996-2000 15.6
15. "Social and ecological rehabilitation and
human health protection in the town of
Chapayevsk, Samara RegionGovernment Decree No. 1071
dated 2/11/951997-2010 1.5
PROGRAMMES FOR ELIMINATING CONSEQUENCES OF DISASTERS AND OTHER EMERGENCIES
16. "Protecting the Russian Federation
population against the consequences of the
Chernobyl Disaster" ("Chernobyl")Decree 1112 of the  Council of
Ministers dated 28/8/971996-2000 136.7WT/ACC/RUS/26
Page 26No. Programme Name Programme Approv al Decision Implementation PeriodFinancing From
the 1997 Federal
Budget
17. "Social and radiation rehabilitation of the
Ural population and areas damaged due to
the operations of Production Association
"Mayak" for the period ending 2000"Government Decree No. 577 dated
13/5/961996-2000 64.0
18. "Rehabilitation of the population, social and
economic development in the areas of Altai
Territory damaged by radiation as a result of
the Semipalatinsk nuclear tests for1994-1995 and for the period ending 2000"Decree No. 1160 of the  Council of
Ministers -Government dated16/11/931994-2000 33.6
19. "Medical and social assistance to the
population, sanitary and hygienicrehabilitation of the localities of the
Republic of Altai damaged by radiation as a
result of Semipalatinsk nuclear tests for1994-1995 and for the period ending 2000"Government Decree No. 1307
dated 31/12/951996-1997 and until 2000 10.2
TOTAL 577.0
__________