RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/ACC/SPEC/RUS/30 
20 January 2003 
 (03-0285) 
Working Party on the 
Accession of the Russian Federation Original:   English 
 
 
 
ACCESSION OF THE RUSSIAN FEDERATION 
 
 Attached is a provisional list of comments, proposals and requests for specific information or 
clarification emanating from the revised dr aft of the Working Party Report (document 
WT/ACC/SPEC/RUS/25/Rev.1 refers) relating to issu es on which the Working Party would revert for 
further work at subsequent meetings.   WT/ACC/SPEC/RUS/30 
Page 2  
 
  
Paragraph 
No. Comment 
66-80 POLICIES AFFECTING TRADE IN GOODS 
Registration requirements for import/export operations 
66-80 We urge the  RF to submit a ne w revision of WT/ACC/SPEC/RUS/21/Rev.1 
Reference Paper 12 on Activities Subject to Licensing  covering both goods and services and including information on licensing bodies, descriptions of  criteria and 
fees. This is important not only in respect  of import/export operations for goods, but 
for trade in services as well.  We agree with other members that a schema for /an example of one good and one service to follow what licenses,  other requirements and possible market limitations 
such as distribution limitations are met before the consumer receives the product 
would help our understanding of the system. We  urge the RF to make this before the 
Working Party’s next meeting. 
66-80 & Table 7 We welcome the additional information provi ded by Russia in relation to its import 
and export licensing regime.  Russia, however, has not addressed many of the concerns of Members in relation to the WTO consistency of its practices.  The 
additional information provided by Russia indicates significant areas where substantive and procedural aspects of its  registration requirements or “activity 
licensing” are unlikely to be in conformity with WTO rules.   
Further discussion in this sphere will need to  concentrate on reforms necessary in this 
area to ensure that the WTO’s guarantees on the right to trade under GATT Articles 
III:4 and XI:1 are satisfied, as well as the provisions of the WTO Agreement on Import Licensing. 
In particular: 
- We ask that Russia augment the info rmation it has provided in the second 
draft to provide a complete description of: 
- the formalities, requirements and eligibilit y criteria that need to be satisfied, 
and the relevant procedures for the application of the restrictions maintained 
on the right to engage in importati on and exportation of select goods (i.e. 
listed in Paragraphs 71-73); 
- their purpose and WTO justification. 
- Additional and more specific questions in relation to each of those measures 
are detailed below.  Russia could address some of these questions by making available copies of English translations  of all relevant legal instruments, 
including those related to activity licen sing, for examination in the Working 
Party. 
- We request that English translations of  all such legal instruments be provided 
for examination in the Working Party. 
68 As only three exceptions are spelled out in  the text (pharmaceuticals, alcohol and 
precious stones and metals), what can then be said on the question posed in para 68 
on gas and electricity? Need consistency in th e text  and no gaps of information that 
might lead to question marks. 
68 Members requests for further informati on on recent efforts of the Ministry of 
Agriculture and State Customs Committee to limit the number of both importing and 
exporting firms engaged in international tr ade of certain products have not been 
addressed in subsequent paragraphs. We ask that Russia confirm that there are no plans to place restrictions on the number of importers and exporters, and that Russian law prohibits such restrictions.   We ask 
Russia to address fully Members’ concerns.  WT/ACC/SPEC/RUS/30 
 Page 3 
 
 
 Paragraph 
No. Comment 
69-70 The registration requirements or requirements for activity license for imports/exports 
are set out in para 69-70 with the three exceptions of alcohol, pharmaceuticals and 
precious stones and metals. As we understand this, except for the three exceptions, the foreign participant (exporter) on the out side of the Russian border does not need 
an activity license. All participants with in the Russian border (importer) need an 
activity license, but this is a general activit y license, not particular to foreign trade. 
The requirements in the text seem clear. Can  registration be denied assuming 
documents are in order? 
71 We seek clarification of the definition of “to do business in these areas” in relation to 
regulation of Production and Turnover of Ethyl Alcohol etc.  We seek clarification as to whether “natural persons and legal entities” also includes 
foreign companies or persons.  Could Russia please clarify whether : (i) foreign 
businesses or persons have the right to partic ipate in foreign trade activity in relation 
to ethyl alcohol, alcoholic and alcoholic-c ontaining products; and (ii) whether they 
are, like Russian participants, requi red to obtain an activity licence. 
72 We suggest that the information in the l ast part of paragraph 73 and in paragraph 74 
concerning restrictions on importation and exportation of pharmaceutical products be 
consolidated into paragraph 72 for the purposes of clarity and transparency. 
- We seek clarification in relation to  the number of licences and approvals 
required to import pharmaceutical products.  Is it the case that importers require both a licence “for the production of wholesale trade” as well as a general licence relating to any activity that “might cause damage to the rights, lawful interests and health of Russian nationals…” prior to obtaining 
an import or export licence?  What is meant by “in all the two cases 
mentioned above”  in the sentence “onc e a company obtained such an activity 
licence in all two cases mentioned above”?  
- We seek greater information in the re lation to the “uniform procedure” for 
obtaining import licences, including formalities, requirements and eligibility 
criteria that need to be satisfied, and the relevant procedures for their 
application. 
- We ask that Russia clarify each stage of this procedure, including in relation 
to obtaining activity licences, the “permission” of the federal medicine control agency referred to in paragraph 74, and the import licence itself. 
- We seek clarification of the policy objective behind requiring the issuance of 
new export or import license for each and every instance of trade, despite the 
fact that importers have also obtaine d activity licences in this sphere.   
73 -  We welcome the additional informatio n provided by Russia in relation to 
precious stones and metals.  However we seek further clarifications.  
- We seek an explanation of the policy objective and WTO justification 
underpinning the prohibition on the exportation from Russia of precious metals. 
- We request (see also in under ‘general ’ above) full information in relation to 
the procedures and criteria underpinning licensing requirements for each product mentioned in Paragraph 73.  For example, we request clarification of 
how non-automatic licensing requirements wo rk in relation to affinated gold, 
silver and natural precious stones. 
80 The commitment in paragraph 80 will ultim ately be acceptable but Russia has not yet 
demonstrated that it can achieve WTO conformity in practice.  WT/ACC/SPEC/RUS/30 
Page 4  
 
 Paragraph 
No. Comment 
Until the issues raised by Members on trad ing rights are satisfactorily addressed and 
appropriate reforms enacted, we will not be  ready to accept that Russia will be ready 
to maintain appropriate WTO conformi ty as foreshadowed at paragraph 80. 
Table 7 We seek clarification of how the struct ures for licensing fees outlined in Table 7 meet 
the requirements of Article VIII:1(a) of GATT 1994.  We request that Table 7 be augmented to in clude all fees associated with each layer 
of licensing mentioned for othe r goods in Paragraphs 71-74. 
81-84 Import Regulations 
- Customs Regulations and Customs Tariff 
81-84 In my delegations view the draft Cust oms Code would address a number of issues 
raised by the members under the whole section dealing with the compatibility of the 
Russian customs procedures with the WTO rul es. Therefore we were glad to note that 
in the document WT/ACC/SPEC/RUS/25/Rev.1/ Add.1 it is indicated that Russia will 
provide that draft to the members of the Working Party. We look forward to receiving 
the draft as soon as possible and we woul d welcome any further details from the 
delegation of Russia concerning the progress on the draft Customs Code. 
84 Customs Valuation is referred to in para 84 and in its own chapter para 142-150. This 
is an important issue for our exporters.  We are pleased with the info given on the 
Draft Chapter 27 (now 25.1?) of the new Tax Code. However, the info in para 84 might be better placed in conjunction with para 149. 
84 Paragraph 84 provides a brief description of  changes to customs regulations and the 
customs tariff.  We welcome information provided to date on new Custom and Tax 
Codes.  While the WTO Agreements do not specify that Russia must provide draft laws, we agree with paragraph 82 that pending the enactment of these new codes and 
submission of them to the Working Party, it is not possible assess their conformity 
with WTO requirements. 
85-90 - Ordinary Customs Duties 
85-90 
Tables 10-12 There will need to be a reference in this section of the draft Report to Russia 
undertaking bilateral market access nego tiations leading to the Schedule of 
Concessions and Commitments on Goods which will be annexed to the draft protocol 
of accession. - We note that the questions raised by Members in paragraph 100 of the first 
draft of ACC/SPEC/RUS/25 were not entirely answered. 
- We seek clarification as to whether further amendments can be expected in 
Russia’s Law on Customs Tariff and whether those amendments would affect key issues such as the application of tariffs, including establishment of the taxable base value. 
90 The issue in para 90  of the possibility to apply double MFN tariff rates to goods 
originating from WTO members must  be seen  in connection with the section on rules 
of origin. 
90 Question provided in the Para 90 of the report continues to be of a serious concern to 
my delegation and we hope that the Russi an delegation can provide its reply at 
today’s meeting. 
91-96 - Tariff Quotas 
91-96 List the items where tariff quotas are used and will be used. 
91-96 We are strongly opposed to Russia’ s proposals to introduce new tariff quotas to 
restrict market access. Whether and how tariff quotas might be applie d is subject to bilateral negotiation at 
present, and we reserve the right to return to the issues raised in this section of the 
draft Report later in the negotiations in the light of agreed terms of bilateral  WT/ACC/SPEC/RUS/30 
 Page 5 
 
 
 Paragraph 
No. Comment 
settlement. 
95 We seek the addition of the following text to the first sentence of this paragraph: 
“by enacting amendments to the Tax Co de to ensure MFN access to its TRQs” 
96 The fundamental issue raised at paragr aph 96 relates to the qualifications that 
enterprises need to have in order to recei ve tariff quota allocations under whatever 
system is used by Russia to allocate tariff quota.  The WTO conformity of the qualifications that enterprises need to have in order to receive tariff quota allocations 
is a separate issue from that of the WTO conformity of the type of allocation method 
used. 
While noting that we do not consider that  the auctioning method conforms with WTO 
requirements, we welcome the statement that  there are no eligibility requirements to 
participate in TRQ auctions that favour lo cal production.  However, we ask that 
information be included in the draft Report that clarifies the qualifications that 
enterprises need to have in order to receive tariff quota allocations. 
100-107 - Fees and Charges for Services Rendered 
Table 10, 
Foot-notes 
10 & 12 Referring to the Table 10 and more specifica lly to footnotes 10 and 12 of that table, 
we would like the delegation of Russia to clarify under which conditions the customs 
authorities may reduce the charges for custom s services. Has it been implemented in 
practice and if so, please provide details rega rding on which products and their origin. 
100-107 
& Table 10 We note that Table 10 contains no reference to fees for the service of conducting 
tariff quota auctions (paragraph 92 refers ).  We do not agree that, under GATT 
Article VIII, tender premiums imposed at auction can represent a fee for a service, as the level of the tender premiums cannot be  determined at auction in a way that 
reflects the cost of providing the service and would normally far exceed such a cost.  
(It is in the nature of auctions, properly conducted, that their outcomes cannot be 
fixed.)  There is therefore an inconsiste ncy in Russia’s position.  In paragraph 92 
Russia claims that the tender premium is a fee for a service.  However in paragraph 
100 Russia correctly does not claim the tender premium as a fee for a service. - We seek an explanation from Russia. 
We welcome Russia’s recognition at paragraph 102 of the need to modify its fees and 
charges to eliminate their ad valorem form  and thereby fulfil one important condition 
for ensuring that such imposts will be limited to the cost of the service, i.e., not being 
made to depend on the customs value of  the goods.  This will be needed for 
appropriate conformity with Ar ticle VIII:1(a) of GATT 1994. 
- We request that reforms be undertaken by Russia to ensure appropriate 
conformity with the provisions of Article VIII:1(a) of GATT 1994, including 
through the replacement of ad valore m imposts with appropriate specific 
imposts, and that Table 10 be ame nded to reflect these changes. 
100-107 We will revert to this  chapter depending on the redrafting, including of the tables. 
 On consular fees
: Our exporters have experienced other fees, i.e. for express service,  
that make  the cost of consular procedur es higher than the costs in table 12. We note 
that exporters are under no obligation to u se consular services for import documents, 
but de facto a consular authentication can have a positive trade effect. We therefore urge the implementation of a transparent system for all fees, and that this issue continues to appear in the report.  
104-107 & Table 11 Paragraph 104 raises a number of issues relating to the nature of the service and the 
types of documents that attracted a stamp tax, and whether these are valid requirements.  While we welcome the add itional information provided by Russia, it 
still fails to address in full the questions rai sed.  Russia has also not responded to the WT/ACC/SPEC/RUS/30 
Page 6  
 
 Paragraph 
No. Comment 
question concerning the ad valorem nature of the Stamp Tax, nor has it indicated that 
Table 11 would be amended appropriately. - We ask that responses be provided to the issues raised by Members in 
paragraph 104.  In particular, Russi a’s initial response (paragraph 105-106) 
fails to explain how these “legally sign ificant actions” relate to the act of 
importation or exportation as s uggested in paragraph 103. 
106-107 & 
Table 12 Consular Fees : 
We welcome Russia’s statement that no special  consular fees are connected with the 
export or import of goods.  Concerns raised  by Members in paragraph 107 in relation 
to conformity with GATT Article I have not been fully addressed. 
- We seek the inclusion of full responses to concerns raised by Members, and 
new commitment language. 
108-110 - Other Fees 
108-110 We note and welcome that all port fees are non-discriminatory. We have noted 
problems of implementation between the Mini stry of Transportation and the Fisheries 
Committee. 
It should be made clearer that the commitme nt text covers more sub-headings than 
the one (”Other fees”) it is placed under. 
109 Referring to the Para 109 we welcome the notion by the representative of the Russian 
Federation that port-charges are collected on the basis of non-discrimination principle. Does this mean that port char ges are applied on MFN basis towards all 
WTO members? How would that commitment relate to the draft MFN exemption list 
of the Russian Federation of 14.03.2002 wh ere it is indicated that Russia would like 
to apply exemption from the MFN treatme nt as regards to the payment of port 
charges. 
126-129 Quantitative Import Restrictions, including Prohibitions and Quotas 
126-129 Referring to the quantitative import restri ctions described in detail in Paras 127 –129 
we would appreciate if the Russian delegation could indicate when the Law No 171 (173?)– FZ is going to be repealed? Do we  understand correctly that this Law is 
going to be repealed by the same dr aft law referred to in Para 77? 
130-141 Import Licensing Systems 
Table 16(a) List of goods subject to non-automat ic import licensing are in Table 16(a). The table 
gives more clarity for some products, a nd a lot less for others. The product group 
information protection has been restricted, which is positive, while no information on the product group on special devices for una uthorised receipt of information. The 
products on the lists referred to  should be listed in the table. 
130-141 & 
Table 16 We welcome the additional information provided by Russia in the second draft, but it 
still remains unclear whether key aspects of  Russia’s current regime relating to 
import licensing systems are in appropriate  conformity with WTO requirements. 
- We support concerns raised by Memb ers in paragraph 132 regarding the 
scope for justifying controls unde r GATT Article XX (paragraph 131), as 
well as those being justified under Article XXI rather than the SPS or TBT 
Agreements (e.g., pharmaceutical produc ts, drugs etc., products for plant 
protection, sturgeon species of fish).  We ask Russia to address the substance of those concerns. 
- While import licensing may be the appropriate mechanism for administering 
certain controls, the justification for cont rols needs in all cases to be fully in 
accordance with applicable WTO rules,  as much as the specifics of the 
import licensing procedures used to administer those controls. 
- We also expect that all measures impos ed by Russia (e.g., fees and charges,  WT/ACC/SPEC/RUS/30 
 Page 7 
 
 
 Paragraph 
No. Comment 
SPS measures and other technical regulations and conformity assessment 
procedures, licensing and approval re quirements and procedures) will be 
applied equally and uniformly to Ru ssian legal and natural persons and 
Russian products as they are to foreig n legal and natural persons and foreign 
products. 
- We ask Russia to provide positive conf irmation of national treatment being 
accorded to foreign legal and natural pe rsons and foreign products, in respect 
of where intending traders are subject to activity licensing requirements and/or import/export licensing requirements. 
- We request full details of all respect s in which foreign legal and natural 
persons and foreign products are subjec t to different requirements from those 
applicable to Russian legal and natu ral persons and Russian products, in 
relation to substantive and procedural  aspects of activity licensing and in 
relation to import and export licensing. 
134-140 We ask that Russia also respond in a s ubstantive way to the concerns expressed by 
Members in paragraphs 134-140. - We seek a response from Russia in re lation to concerns about the double 
requirements for importing alcoholic beve rages.  Furthermore, we note that 
the same concern applies to importati on of pharmaceutical products (which 
requires an activity and an import licence). 
- We seek further clarification of the Russia’s current procedures for import 
licensing (paragraph 134), and how they specifically meet the requirements 
of the WTO Agreement on Import Licensing. 
- In relation to the question posed in paragraph 137 as to whether foreign 
manufacturers of pharmaceuticals required an office in the Russian Federation in order to obtain a licence, we note that the response provided in Paragraph 140 requires clarification.  Will Russia confirm that the only 
requirement for a foreign company to ob tain an import licence is registration 
in Russia, but that if it is not regist ered it can still obtain a licence provided it 
had a representative office in Russia? - Is it possible under Russian law for a foreign company to open a 
representative office in Russia without becoming a registered company? 
- What are the requirements for becoming a registered foreign 
company in Russia? 
140 We appreciate the statement in Para 140 th at the legislative and regulatory framework 
to modify procedures for imports of pha rmaceutical substances and medicines is 
currently ongoing. Would these legislative changes repeal the fee of 0.05% of the 
contract value of goods for issuance of  preliminary permits for imports of 
pharmaceutical products that is currently char ged inconsistently with Article VIII of 
the GATT 1994? 
142-150 Customs Valuation 
142-150 Important area of practical concern on implementation. The descriptions of the 
special techniques of customs control in the text and in WT/ACC/RUS/28 are not 
clear and precise enough and mo re information is needed. 
144 We ask that a response to the concern ra ised in paragraph 144 regarding the guarantee 
system required under the Agreement on the Implementation of Ar ticle VII of GATT 
1994 be included in the draft Report. 
149 We support and seek a response to Member s’ calls for further information on the 
amended Tax Code and the draft Customs C ode to enable discussions on conformity WT/ACC/SPEC/RUS/30 
Page 8  
 
 Paragraph 
No. Comment 
with WTO requirements. 
151-158 - Rules of Origin 
151-158 Normally the country of origin will most  often be stated in the  trade documents/ 
invoices. A certificate of origin is normally not necessary, unless requesting 
preferential treatment. Para 152 , as in para  163 of the former document,  uses the 
word ”might” e.g. ”might request a certifi cate of origin” or ”might be no mandatory 
requirement to submit a certificate of origin”   
Our exporters are confronted with uncerta inties as Russian practice can be  unclear 
and opens for high tariffs (double the MFN -rate). This again means that for all 
practical purposes an exporter needs a certificate of origin even though it shouldn’t be necessary when not requesting preferential treat ment and when the origin is reflected 
in the documentation for customs clearance. The non-clarity and unnecessary 
bureaucratic burdens should be solved by th e time of WTO-accession. First there is a 
need for more information on practice. 
152 We refer to the reference in paragraph 152 to country quotas and “other methods for 
regulation of foreign economic activities”.  - We seek the inclusion in the draft Report of explanations of the 
circumstances under which these two measures are applied. 
159-163 - Other customs Formalities 
159-163 We seek the inclusion in the draft Report of a response to the concerns outlined in 
paragraphs 161.  In particular, can Ru ssia please explain how its limitation on 
customs clearance of particular goods to certain border points does not constitute an 
unjustifiable barrier to trade under GATT Article XI and other WTO provisions? 
162 Referring to the statement made in the Para 162 we are of the strong view that articles 
V, VIII and X of the GATT 1994 already contain a number of important 
commitments so we cannot accept that  Russia would make acceptance of 
commitments on these areas conditional of th e negotiations inscribed in the Doha 
mandate. 
164-165 - Pre-shipment Inspection 
164-165 We have no substantive problems with the text in paragraphs 164-165.  However: 
- We would like Russia to comment on wh y it considers it might be necessary 
to implement preshipment inspection. 
166-175 - Trade Remedy Measures 
166-175 Information based on new legislation expected. 
166-167 Import Surcharge : 
We note paragraphs on Russia’s import surcharge (paras 122-123 of the first draft report) have been transferred to another part  of the Report.  We nevertheless seek the 
inclusion in the draft Report of responses to the concerns raised by Members in paragraph 123 of the former draft.  
We seek the inclusion of commitment language. 
169-170 Paragraph 170 seems to suggest that some  legislation on trade remedies has already 
been passed whereas paragraph 169 refers  to Russia’s intention to pass such 
legislation. - We ask that these paragraphs be reconciled. 
171 Members have raised what appear to be several legitimate concerns which have not 
been fully addressed by the response in para graph 171, particularly in relation to 
safeguards.  Furthermore, we seek clarifi cation of the meaning of the passage within 
Federal Law No.63-FZ that investigati ons “should be primarily devoted” to 
determination of injury, causa tion aspects and dumped imports.  WT/ACC/SPEC/RUS/30 
 Page 9 
 
 
 Paragraph 
No. Comment 
We ask that the substance of these concerns be addressed. 
173 We seek an update on the passage of legi slation referred to in paragraph 173. 
176-181 Export Regulations 
- Export Duties 
179 suggests the addition of the following text at the end of the paragraph: 
 "Some members also requested the Russi an Federation to reduce the number of 
products subject to the export duties, especi ally the products with higher value added 
(e.g. a coniferous bonded wood), so that the negative impact in trade in such products 
with higher value added can be minimised." 
181 suggests the addition of the following text at the end of the paragraph: 
 
"[…The Russian Federation confirmed its e fforts the reduction in the number of the 
products subject to export duties, especially the products with higher value added.]" 
182-187 - Quantitative Export Restrictio ns, Including Prohibitions and Quotas 
183 We thank Russia for the explanation of nati onal interest contained in paragraph 184.  
We ask that Russia include in the draft Re port a response to the question in the first 
sentence of paragraph 183 asking for details  of export restrictions abolished since 
1996. 
188-194 - Export Licensing Procedures 
Table 17 (a) We welcome that Russia is no long er seeking WTO legal cover under the exceptions 
of Article XX of GATT 1994 for measures applied by means of the non-automatic 
licensing to exports of certain precious meta ls and stones, objects made thereof, and 
certain alloys, semi fabricates, ores, concentrates and wastes (Table 17(a). 
189-191 We welcome Russia’s recognition that export restrictions on precious stones and 
metals (paragraphs 191) are not in compliance with WTO disciplines.   
- We request Russia to include in this section of Report a clarification and full 
explanation of the purpose and justif ication sought under GATT Article 
XV:9(b) for the non-automatic licensing of exports of precious metals and stones, objects made thereof, and certain alloys, semi fabricates, ores, concentrates and wastes. 
- We seek an update on the efforts to am end laws and regulations relating to 
these measures to ensure WTO consistency. 
Members also raised the justification for export restrictions on pharmaceuticals 
(paragraph 189) and restrictions on custom s posts and distribution (paragraph 192). 
- We seek the inclusion in this section of the Report of Russia’s responses to 
these concerns. 
- We also note that Russia’s table of goods subject (Table 17(a)) includes a 
larger number of entries than in th e previous draft of the Working Party 
report.   
- We seek clarification as to the r easons for the addition of some goods. 
Furthermore, we seek clarification as to whether the exclusion of alcohol and 
vodka from the list means that all export licensing procedures in relation to 
these products have been removed. 
195-199 - Export Financing, Subsidy and Promotion Policies 
195-199 We seek the inclusion in this section of  the draft Report of fuller responses to the 
concerns raised by Members under para graphs 195 and 197, including through the 
provision of detailed information on the natu re of any industrial subsidies that may 
impact on export industries. 
199 Commitment text of para 199 made much  clearer, includes now deferrals of taxes. WT/ACC/SPEC/RUS/30 
Page 10  
 
 Paragraph 
No. Comment 
202-208 3. Internal Policies Affecting Foreign Trade in Goods 
- Industrial policy, including subsidy policies 
202-208 Need a  complete picture of RF’s subs idies and rules/legislation in subsidies and 
economic effects to get the correct picture of  possible trade effect s. This information 
should be based on the notification requirement s for subsidies that RF will face as a 
member of the WTO. 
202-208 This section should include informati on on the elimination of coal subsidies. 
- We ask that details of the elimination of coal subsidies be included in this 
section of the draft Report.  Have all coal subsidies been eliminated?  If not, 
we seek the inclusion of details of the remaining subsidies and Russia’s plans to eliminate them. 
204-206 Members have raised a number of concerns  specified in paragraphs 204, and 206, in 
relation to which more discussion will be needed. - We seek the inclusion in this section of the draft Report of full responses to 
those concerns. 
206-207 The issue of natural monopoly pricing concerning existing pricing mechanisms and 
reforms are taken up in  para 206 and 207 and will need to be  elaborated in the future. 
Will continue to work on this problem based on the plurilateral energy discussions. 
The  issue is whether there is de facto subsidization of the Russian fertilizer industry through the prices on inputs (gas) or even by the non-payment of inputs leading for example to debt/equity swaps. 
246-250 - Trade-related Investment Measures (TRIMs) 
246-250 Additional inform ation on production sharing is still necessary in this chapter. The 
provision for some obligations of foreign investors taking part in PSA schemes to place some portion of their orders for locally produced goods must be elaborated. Such practice is inconsistent with Art III of the GATT, see the illustrative list 
annexed to the TRIM Agreement. Inform ation on changes to conform with the 
TRIMs Agreement is also necessary. 
246-250 We seek the inclusion in this section of the draft Report of full responses to the 
requests made and concerns raised by Memb ers in paragraph 248.  Paragraph 249, for 
example, does not address the issue of production sharing agreements. 
248 Regarding TRIMS we feel that the ques tion in Para 248 on the Law on “Production 
Sharing” are not sufficiently addressed by the delegation of Russia. We would welcome any further replies in that regard. 
Russian Federation Response:  
 Law of the Russian Federation of December 30, 1995, No. 225-FZ «On Production Sharing 
Agreements» provides legal framework for relations arising in the course of Russian and 
foreign investment in search, exploration and mining of minerals on the territory of the 
Russian Federation and the continental shelf and/or within the boundaries of the exclusive 
economic area of the Russian Federation on the terms of production sharing agreements. 
 
The rights and obligations of the parties to a production sharing agreement are governed by 
civil law. A production sharing agreement is a contract by which the Russian Federation 
provides to a business, in consideration for a co mpensation and for a limited term, exclusive 
rights to perform search, exploration and mining of  minerals in a subsoil plot specified in such 
agreement and any related works, and the invest or undertakes to perform the said works at 
own risk and expense. 
 
Federal Law «On Production Sharing Agreement s» has been amended and supplemented twice  WT/ACC/SPEC/RUS/30 
 Page 11 
 
 
 Paragraph 
No. Comment 
by federal laws of January 7, 1997, No. 19-FZ, and of June 18, 2001, No. 75-FZ. 
 Federal Law of January 7, 1999, No. 19-FZ, intr oduced the requirement that the terms of the 
tender or auction must provide for participation of Russian legal entities in the implementation 
of the agreement to such extent (in such proportion) as determined by the Government of the 
Russian Federation and competent executive au thorities of the Russian Federation regions 
(Article 7).  The Law also requires the parties to provide as a condition of the agreement that no less than 
the specified portion of mining and processing  (if envisaged by the agreement) technologies 
purchased by the investor must be produced on the territory of the Russian Federation. 
 The State Duma of the Federal Assembly of th e Russian Federation has been presented with a 
draft federal law amending and supplementing Article 7 of the Federal Law of the Russian 
Federation «On Production Sharing Agreements» providing that a certain value of orders (as a 
percentage of total investment) for equipmen t, machinery and supplies purchased by the 
investor during the periods of time or phases of work provided by the agreement for geological exploration, mining, processing or transportation  of minerals must be placed with Russian 
legal entities.  
Further, the State Duma has passed in the first  reading the draft federal law amending and 
supplementing the Federal Law «On Pro duction Sharing Agreements» providing: 
 - that a limited period of time be allowed for preparation and signing of a PSA. It is 
proposed to establish a 2-year period fo r negotiation and signing of an agreement; 
- for mandatory official publication of details of the participants, project value, taxes and 
payments; 
- for a new scheme for dividing production into profit and compensatory values. It is also 
proposed to replace all taxes and levies, in cluding profit tax and royalty, for the 
investor with a single tax. The draft law provides a more detailed procedure for transfer of rights and obligations under a PSA in the event of reorganisation of the 
participating legal entities. 
 A significant legislative development is Reso lution of the Government of the Russian 
Federation of August 30, 2001, No. 1155-r appointing the State Unitary Enterprise «Russian Foreign Economic Association «Zarubezhne ft» and OJSC «Oil Company Rosneft» as 
organisations authorised to assist protection of  the interests of the Russian Federation in the 
preparation and implementation of production sharing agreements in respect of subsoil plots and deposits of hydrocarbons [measures affect ing import or export by private businesses]. 
 The agreements are valid nowadays:  
- Production sharing agreement on Chayvins koe, Odoptinskoe and Arkutun-Daginskoe 
oil and gas-condensate fields (Sakhalin-1),  Production sharing agreement on Piltun-
Astokhskoe and Lunskoe oil and gas fields (Sakhalin-2), Production sharing agreement 
on oilfield development and oil produc tion on Haryaginskoe oilfield, Project 
"Samotlorskoe field". 
 
Based on the Presidential Decree No. 135 of  5 February 1998 "On Attracting Additional 
Investments to Promote the Automobile Industry"  and the Government Resolution No. 413 of 
23 April 1998 "On Additional Measures to Attr act Investments for the Development of the WT/ACC/SPEC/RUS/30 
Page 12  
 
 Paragraph 
No. Comment 
Domestic Automotive Industry" there w ere 4 investment agreements concluded: 
- with Finance and Industry Holding «Doninvest » for the production development on SK 
«Taganrog car plant »; 
- with the Russian-French firm JSK «Avtoframos»; 
- with Russian-American firm SK «Ford Vsevolzhsk»; 
- with Russian-Italian firm SK « Nizhegorod Motors » 
 All these agreements provide for establishing of ca r assembling units in the Russian Federation 
by the companies «Daewoo» (Southern Korea), «Renault» (France); «Ford Motors» (USA) and 
«FIAT» (Italy) respectively. 
 
Car-making industry
 
 Resolution of the Government of the Russian Federation of July 16, 2002, No. 978-r approved the Development Concept of the Russian Car-Making Industry (hereinafter the Concept). The 
Ministry of Industry and Science of the Russian  Federation and the Ministry of Economic 
Development of the Russian Federation jointly wi th the affected federal executive authorities 
have been instructed to develop a plan of measures to implement the mid-term Development 
Concept of Car-Making Industry (2202 – 2004) and submit it within 2 months to the 
Government of the Russian Federation (the plan of measures has not been approved yet). 
 
The Concept defines the goals, tasks and prioriti es of the sectoral development to satisfy the 
requirement of the domestic market, develo p production capacities, increase export of 
motorcars and ensure national security. Th e Concept covers the period until 2010. 
 The objectives of the Concept are to create an environment congenial to development of the 
Russian car-making industry, its integration wi th the international ca r-making, and improved 
effectiveness of production of modern compet itive motorcars satisfying the needs of the 
population and the economic actors. Among th e basic provisions of the Concept are the 
following.  
Improved competitiveness of motorcars may be achieved through institutional changes, 
development of production of hi-tech component parts and materials, application of state standards compatible with international re quirements, improvement of R&D and labour 
components.  
Confirmation of conformity of motorcars, co mponents and spare parts to the existing 
standards takes the form of voluntary certificat ion or declaration by the manufacturer or the 
seller. Voluntary certification of products of car-maki ng industry will contribute to the improvement 
of quality, reliability, durability and suitability to the working conditions, and other consumer 
qualities of cars. 
 The use of customs tariff regulation in car-maki ng must be conscious of the need to protect 
domestic producers with a view to successfully  implementing the investment programmes of 
the enterprises of the sector and filling the do mestic market with competitive machinery. 
 
The Concept deems it reasonable to keep the present import customs duty rates for new cars 
and those that have been used for up to 7 yea rs, unchanged for a seven-years transition period. 
The said transition period should be sufficient for the Russian Federation to improve domestic  WT/ACC/SPEC/RUS/30 
 Page 13 
 
 
 Paragraph 
No. Comment 
production so that it may become competitive on the domestic and foreign markets. Special 
attention should be given to creating capaciti es to produce competitive hi-tech automobile 
components.  
Imported cars that have been used for over 7 years must be subject to import customs duty 
rates proportionate to those charged on new cars.  Domestically-produced cars that ha ve been used for more than 7 years will be made subject to 
higher insurance premiums and charges for th e owners so that to make maintenance and 
operation of such cars uneconomic and thus to generally improve age characteristics of 
privately owned cars. 
 Import customs duties may be reduced for cert ain types of vehicles that are not produced 
domestically provided that their characteristi cs correspond to long-term international norms. 
 
Customs duties for imported components and mate rials for industrial assembly of cars must be 
optimised. This will allow reducing the cost of  such cars and stimulating development of 
assembly facilities in Russia.  It is proposed to reduce customs duties for car- making technologies that are not produced in 
the Russian Federation. 
 Priority measures of state support for develo pment of domestic car-making include, among 
others:  - to create new effective production faciliti es to manufacture automobile components in 
the existing and future federal target programmes; 
- to develop a Russian-Byelorussian program for development of diesel car-making for 
2003 – 2008; 
- to assist the development of a financial leas ing system in production and distribution of 
public use motorcars; 
- to assist implementation of investment projects in the territory of the Russian 
Federation involving foreign car-makers; 
- to introduce an insurance system of moto rcars and civil liability based on the age of 
cars; 
- to reduce the rates of customs duties for t echnologies, components, aggregates, blocks, 
details and parts that are not pro duced in the Russian Federation; 
- to raise import customs duties for motorca rs and buses with a long operational life; 
- to level out customs duties for legal entities and individuals for the purpose of import to 
the customs territory of the Russian  Federation of used motorcars; 
- to purchase domestic moto rcars for government needs. 
251-259 State-trading enterprises ("STEs") 
251-259 We understood that the present text does not  reflect state-trading in Russia, and we 
therefore expect a new draft text. Members’ comments on ”artificially low domestic energy prices” are reflected in the text, but  Russian replies are also necessary. More 
detailed information on Gazprom and the other state-trading enterprises is necessary 
to evaluate whether the commitm ent language is appropriate.  
252 In paragraph 252, it is stated that export deliveries of raw diamonds from the Russian 
Federation were executed on the basis of commercial contracts concluded between 
Alrosa and foreign enterprises, and “the stat e did not interfere into the substance and WT/ACC/SPEC/RUS/30 
Page 14  
 
 Paragraph 
No. Comment 
form of these contracts”.  Our understanding  is that the Russian Government approval 
or ratification of Alrosa’s marketing ar rangements is required prior to export. 
- We ask that Russia provide a full description of the procedures relating to 
Alrosa’s ability to enter into commercia l contracts, how adequate opportunity 
is afforded to the enterprises of other members to participate in such sales or 
purchases, and confirm that no Government approval or ratification of the terms of an intended sale and an export  licence in relation to that sale is 
required. 
- We ask also that Russia comment on th e relevance of the Understanding on 
the Interpretation of Article XVII of  GATT 1994, which contains provisions 
concerning notification. 
255-256 We seek the inclusion in this section of the draft Report responses to the requests 
made and concerns raised by Me mbers in paragraphs 255 and 256. 
260-267 - Free Zones and Special Economic Zones 
260-267 We seek the inclusion in this section of  the draft Report of responses to the questions 
raised by Members in paragraph 263 and the proposal in paragraph 266. 
276-279 - Policies Affecting Foreign Trade in Agricultural Products 
276 Could Russia explain more specifically what degree of food security would be 
considered as sufficient for Russia. 
278 With reference to the ongoing agricultural plurilateral process, we suggest that the 
draft Working Party Report note that a more comprehensive submission of the 
Russian Federation’s recent agricultural s upport policies is still required.  This 
information is needed in order to est ablish an acceptable basis upon which the 
Russian Federation’s agricultural commitments could be founded, consistent with the 
requirements set out in WT/ACC/4. 
285-287 TRADE-RELATED INTELLECTUAL  PROPERTY REGIME (TRIPS) 
General 
285-304 The TRIPS Agreement allows Members some discretion in the measures that are 
implemented.  For example, Article 27(3)  provides exclusions from patentability. 
- What exclusions from patentability will Russia be applying? 
Russia has commented on the legal provisions that will be in place to combat infringements of intellectual property rights.   However, these provisions will only be 
effective if the owners of intellectual property rights and the public are aware of the intellectual property system and those rights. - We ask Russia to provide information on what action the Russian authorities 
are taking to increase awareness of intellectual property rights among the 
public, the judiciary, education and research institutions, industry and 
businesses. 
WTO Members are bound by the provisions of the TRIPS Agreement which subject 
their pharmaceutical industries to 20 years of  patent protection.  We would expect 
this minimum patent protection to be implemented by Russia. 
- Will Russia subject its pharmaceutical indus try to a term of patent protection 
of not less than 20 years? 
305-326 TRADE-RELATE D SERVICES REGIME 
Policies Affecting Trade in Services 
305-326 Some important changes made to the te xt, especially that the reference to natural 
monopolies has been deleted. We take that as a reflection of the fact that the issue of 
monopolies is in essence a mark et access restriction that is part of the specific 
commitments negotiations. However, it is impor tant to have some detailed references 
to the regulatory framework concerning monopolies in the WP report.   WT/ACC/SPEC/RUS/30 
 Page 15 
 
 
 Paragraph 
No. Comment 
 
We refer to some of the comments we made  on natural monopolies at the plurilateral 
on services on November 1:  - Two issues related to natural monopolies 
- natural monopolies as an argument for not allowing market access, and 
- the regulations on natural monopolies, and whether some of these are in 
contradiction to the GATS or fall under the GATS,  esp. Art VIII on monopolies and exclusive service suppliers  and art IX on Business Practices. 
We agree that these articles are relatively narrow. 
- On 1: We do not accept the argument that for sectors dominated by so-called 
natural monopolies, it is  impossible  or extremely difficult to increase market 
access.  For the energy sector, the only natural monopoly with decreasing marginal costs would be the transportation/distribution networks (gas pipelines, electric power transmission and distribution lines), i.e. the lines not the transportation as such. The same goes for telecom and some areas of  the 
transportation sector (services connected to ports, terminals etc. are 
”unbundled” and not  naturally part of monopoly). For natural monopolies in infrastructure, it is important to en sure that both producers and consumers 
have non-discriminatory access to them on transparent and objective terms, similar to those established for instance through the Reference Paper for 
Telecommunications.  
- On 2: The test of whether anti-monopoly regulations might not be conform 
with the GATS, is to look to art II on MFN, art XVI and art XVII specifically. 
306 If measures are to be taken for safeguard reas ons, they have to be in conformity with 
the GATS, regardless of whether it is for infant industries or other business. 
307 Russia is intending to maintain its subsid ies to domestic service providers, the bulk of 
which go to large service providers such as Rostelekom, Ingostrakh, Aeroflot, etc. - We seek the inclusion in this section of the draft Report of factual 
information on the types and levels of  subsidies currently provided; Russia’s 
intentions in respect of areas currently  not receiving any subsidies; and an 
undertaking by Russia to phase out its system of subsidies. 
- We seek the inclusion in this section full responses to questions raised by 
Members. 
We note that a number of issues are still subject to the broader plurilateral 
discussions, and we reserve the right to request further changes in this section pending their outcome. 
320 We assume that the measures referred to either come under prudential measures or 
BOP-measures and should be conform with the GATS. 
321-324 Para 321-324 are as before and do not reflect discussions at the plurilateral on 
services. We therefore reiterate some of our comments. 
321 The use of public utilities argument cannot be  used for protectionist purposes or in 
areas where the services are of a narrow nature that cannot be defined as a general public service. Specifically on environmental services, no intention to undermine the freedom for local government, municipalities  to decide whether they themselves 
operate or by tender open up to private actors to operate e.g., sewage treatment 
facilities or refuse disposal. Does not undermine government’s rights to formulate and implement national environmental policies. In taking commitments in the area of public utilities it is possible to make the dis tinction between statutory work on behalf 
of and delegated by government, and commercial services in the area  and we would WT/ACC/SPEC/RUS/30 
Page 16  
 
 Paragraph 
No. Comment 
urge the Russian delegation to look further into this matter. 
322 -  On culture, comparing the WP draft repo rt and the Russian services offer, the 
report text seems wide open as to when and were there might be authorization requirements in place, while in the offer it seems only related to education. The working party text canno t be that general because it can imply 
a national treatment restriction. We would like a confirmation that where 
specific commitments are made, no new (Art XVI- and Art XVII-) 
restrictions based on cultura l concerns suddenly pop up. 
- On specifically protected natural te rritories, we would think that the 
regulations to protect such territories would be the same for all, and as such are covered by  the GATS (relevant articles are preamble and art VI on 
domestic regulation, and Art XIV (b)). 
 
__________