RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/ACC/SPEC/RUS/15 
12 July 2000 
 (00-2846) 
Working Party on the  
Accession of the Russian Federation Original:   English 
 
 
 
ACCESSION OF THE RUSSIAN FEDERATION 
 
Communication from H.E. Mr. William Rossier,  
Chairperson of the Working Party  
 
 
You will recall that in closing the Worki ng Party meeting on 25 May 2000 I announced my 
decision to relinquish my function as your Chairp erson and move on to other responsibilities. After 
five years of intensive work I believe it is my du ty to share with you my assessment of where matters 
stand in this Working Party and offer my recomme ndations on substantiall y moving this important 
accession forward.   
To this end, on my own responsibility,  I have prepared the attached overview.  It aims to 
provide Members with a comprehensive, if not ex haustive, factual overview of the Working Party 
proceedings since the first meeting in July 1995 up  to the most recent meeting in May 2000.  To 
facilitate consideration, I have structured th e note along the line of the Russian Memorandum on 
Foreign Trade Regime, on which any future report of the Working Party would have to be based.  It 
constitutes a sort of annotated checklist of issues on which, I believe, future work should focus.  
Indeed, my objective is to facilitate further work  on developing a solid framework for accurately 
describing the Russian Federation's foreign trade instruments and measures for which enforceable 
commitments can be agreed. 
 These commitments are essentially linked to legi slative acts or implementing regulations.  
The vast changes in the legislative agenda have b een welcomed by all members of the Working Party.  
However, these, and the progress forese en in the future, will need to be  further clarified and translated 
into detailed action plans describing the individua l legislative and executive actions underway, as well 
as proposed, in order to ensure that the Russian Federation will be able to implement and enforce 
WTO Agreements upon accession.  As I see it, these commitments are related to the general trade 
regime as well as to its specific elements.  In the general category, I can think of, for example: 
 
- federal authority to enforce the WTO Agreements  in the territory of the Russian Federation; 
- transparency requirements under the WTO; 
- WTO judicial review requirements; 
- right of individuals and firms to engage in trade. 
 In the category of specific elements of the Russi an foreign trade regime, many areas remain to be 
considered, clarified, and multilaterally agreed.  In  fact, these must also be addressed urgently to 
ensure smooth progress of the bilateral market ac cess negotiations in goods and services.  I have 
pointed out quite a number of these ar eas in the attached overview.   
 I consider this overview timely also because, fo r the several important reasons mentioned in 
my concluding remarks on 25 May 2000, our last mee ting marked a water-shed in this accession. If 
the WTO related reform process in the Russian Federation proceeds as programmed in the coming WT/ACC/SPEC/RUS/15 
Page 2  
 
months, the next meeting of the Working Party could begin a new accelerated phase.  I sincerely hope this will be the case.  
My overview does not only set out areas and subject -matters on which further work is clearly 
required.  I hope it also helps to identify the in terlinkages that exist be tween and among different 
aspects of the accession process.  I have already emphasized the need for an enforceable legal 
framework in the Russian Federati on also as an essential condition for achieving meaningful progress 
in the market access negotiations. This is not, of co urse, specific to this accession but, rather, central 
to all accession processes. But again, as I stated earlie r, in the Russian Federation's case, due to the 
complexity of the legislation already in place as well as the intensive legislative programmes foreseen, 
it is crucial that members of the Working Party ga in a total and complete picture of the means by 
which the Russian authorities intend to implement WTO commitments.   
 At our last meeting we began such a process.  My first recommendation
 is that the review of 
legislative developments should continue in an  increasingly focused manner including, wherever 
possible, the provision of draft legislative texts to members of the Working Party together with 
precise indications, in each case, of the time-fra mes foreseen for the en actment of laws and 
regulations.  
I would also like to emphasize the need to con tinue intensive technical work on a number of 
subjects which are particularly important for creati ng a solid framework within which bilateral market 
access commitments, as well as Russia's multilateral term s of entry, can be meaningfully negotiated. 
My second recommendation
 is, therefore, to continue this work with a view to establishing a 
multilaterally shared understanding on which work can proceed constructively.  I have in mind 
technical work in a number of areas such as subs idies, agriculture, customs valuation, technical 
standards, intellectual property rights, etc. 
 
This brings me to my third recommendation.  Starting this year itself, there is need to intensify 
bilateral market access negotiations in goods and ser vices. The submission of the Russian Federation's 
Services offer has now placed before the Working Pa rty all the elements needed for these negotiations 
to advance.   
These reflections have resulted from the prepara tion of the attached overview.  Overall, it 
remains my perception that this accession process is  now running in parallel with Russia's economic 
reform process, each supporting and helping the ot her.  This was confirmed by my recent visit to 
Moscow in June this year. During this visit, I ha d the opportunity to hold substantive discussions with 
Government authorities, members of the Duma  and representatives of the Russian business 
community.  I received confirmation from all quarters that accession to the World Trade Organization 
remains a top priority for the Russian Federation.  I also got an indication of the readiness of the 
Russian Government to intensify the negotiating process in the months ahead.  
 Finally, I wish to stress once again that the attached note reflects my own views and does not 
prejudge the positions of members or the Russian Federation on these or other matters. 
 
I thank you again for your support and cooperation and wish you all success. 
 
 
_______________ 
  WT/ACC/SPEC/RUS/15 
 Page 3 
 
 
ATTACHMENT 1 
 
Chairperson's Overview of the State of Play in the  
Working Party on the Accession of the Russian Federation  
to the World Trade Organisation  
 
Introduction 
1. As members of the Working Party would recall,  the Government of the Russian Federation 
requested accession to the General Agreement on Ta riffs and Trade (GATT 1947) in June 1993.  At 
its meeting on 8 July 1993, the GATT Council of Representatives established a Working Party to 
examine the application of the Government of the Russian Federation to accede to the General 
Agreement under Article XXXIII.  In pursuance of the Ministerial Decision of 14 April 1994 on Acceptance and Accession to the Marrakesh Agreem ent Establishing the World Trade Organization 
(WTO) and the decision of 31 May 1994 of the Pr eparatory Committee for the WTO, the Working 
Party examined the application of the Government of the Russian Federation for membership in the 
WTO.  Following the entry into force of the WT O Agreement on 1 January 1995, and in pursuance of 
the decision adopted by the WTO General Council on 31 January 1995, the GATT 1947 Working Party was transformed into a WTO Accession Work ing Party under Article XII of the Marrakesh 
Agreement Establishing the WTO.  My Chairpers onship, originally noted in 1993 by the GATT 
Council of Representatives, was confirmed by the WT O General Council at the same meeting.  The 
terms of reference and the current membership of the Working Party are reproduced in document 
WT/ACC/RUS/1/Rev.7. 
2. Under my Chairpersonship, the Working Part y  held ten meetings from July 1995 to May 
2000.  The following overview sets out my assessment of  work done so far in the Working Party.  As 
your outgoing Chairperson, it is being sent to you on  my own responsibility in the expectation that it 
will prove a useful instrument in planning the work ahead. 
Documentation 
3. The most recent list of documentation provided to the Working Party 
can be found in 
WT/ACC/RUS/11/Rev.10. 
General Statements 
4. In recalling the history of the Russian Federa tion's application to accede to the WTO, it was 
noted that the Russian Federation had been an ob server to the GATT 1947 since January 1992 and, in 
this capacity, had witnessed the successful conc lusion of the Uruguay Round and followed its 
implementation. In more recent years, the Russian Federation had begun a process of economic 
reform which encompassed a substantial liberalisatio n of its foreign trade régime and the adoption of 
laws and regulations based on WTO requirements.  Moreover, as a result of the Government's 
concerted efforts to encourage entrepreneurial activ ity, facilitate foreign inv estment, and expedite the 
privatization of State assets, the economy of the Russian Federation had been heading towards an 
increasing degree of stabilization.  The Government has been making substantial efforts to control 
inflation and the budget deficit.  Having pursue d trade policies based on GATT principles, full 
membership in the World Trade Organization w as an important missing element in the Russian 
Federation's trade policy and remained, therefore, a priority objective of the Russian Government.  
5. The Working Party welcomed the Russian Fede ration's application for accession to the WTO 
and stressed the importance of a rapid completion of the process of accession on terms which are 
mutually beneficial to the Russian Federation and to WTO Members. Regarding the multilateral 
aspects of the terms of the Russia Federation's acce ssion, a central point of interest revolved around WT/ACC/SPEC/RUS/15 
Page 4  
 
the examination of WTO related legislation and the ongoing process of legislative reform aimed at introducing the new legal, administrative and enforcement infrastructure required under WTO 
agreements.  
ECONOMIC POLICIES 
Monetary and Fiscal Policy 
6. During discussions on Russian monetary and fiscal policy, the importance of consistent and 
balanced tax policies was constantly emphasized in or der to increase the level of predictability of the 
fiscal régime and of foreign investment in the Russi an Federation.  Information was requested on the 
evolution of the tax régime, including tax incen tives aimed to encourage foreign investment.  
Members also expressed interest in receiving information on the new economic programme prepared 
by the Russian Government.   
7. The Russian authorities noted that monetary and fiscal policies were being reformed in 
consideration of WTO requirements.  Under this ite m (cf. also "Application of internal taxes to 
imports" in paragraph 22 below) it was further noted that, in view of the accession process, the 
Russian Federation had taken steps to introduce reformed excise and VAT systems which would 
conform to WTO requirements.  It was acknowledged,  however, that there was still a need to unify 
the different VAT régimes which the Russian Federa tion currently administered with regard to CIS 
countries where VAT was applied upon export, and to  all other trading partners for whose products 
VAT was applied upon sale in Russia. Legislation planned in this field, including drafts where 
possible, would require further examination by the Working Party.  
Foreign Exchange and Payments 
8. In response to questions raised during di scussions on the Russian Federation's foreign 
exchange régime the Russian authorities confirmed that the Russian Federation, as a member of the 
International Monetary Fund since 1992, followed  internationally accepted monetary rules.  
Following the currency crisis in August 1998, certain  measures were introduced  to ensure that the 
devaluation of the rouble did not produce excessive inflation.  The Working Party considered that 
more information was needed on the current situation and practices in this area.  Information was also 
sought on past and present currency controls and on any developments foreseen in this respect. 
Investment Régime 
9. In reviewing the Russian Federation's investme nt regime, it was noted that the basic legal 
provisions relating to foreign investors were contai ned in the Constitution of the Russian Federation, 
the Civil Code and  Federal Law No. 160 of 9 July  1999 "On Foreign Investment".  Questions were 
also raised concerning draft legislation under prepar ation in 2000 that would restrict or ban foreign 
investment in certain sectors of the economy.  Th e Law "On Foreign Investment" provided national 
treatment for foreign investors, potential incentiv es and a wide range of guaranties for foreign 
investors. Restrictions on foreign investment could be required for reasons rela ting to the protection of 
constitutional order, public morality, public health, rights and legitimate interests of other persons, 
state defence and national security.  There could also be restrictions of a general economic character.  
For instance, under the Law "On Production Sharing Agreement", a decision on access of foreign investors to natural resource sites must be taken simultaneously with the decision on the 
corresponding tender.  Moreover, the foreign i nvestor who had won the tender might still be 
dismissed if the Federal Security Service so reco mmended.  Members of the Working Party stressed 
the importance of establishing a transparent and pred ictable framework for investment and noted the 
potential negative effect of sectoral restrictions on foreign investment on market access for goods and 
services.    WT/ACC/SPEC/RUS/15 
 Page 5 
 
 
10. Also, under the existing system in the Russian Federation, investment incentives could be 
introduced if deemed to be in the interest of  social and economic development of the Russian 
Federation.  For instance, the Federal Laws "O n Value Added Tax", "On Customs Tariff" and "On 
Profit Tax of the Companies and Organisations" prov ided foreign investors with various incentives to 
invest.  Discussions took place and many questi ons remained pending on the details of those 
provisions.  Some members requested further clarif ication of the investment regime, notably on the 
Russian Federation's programme for pr omoting investment and its treatment of foreign investors, with 
a view to agreeing enforceable multila teral commitments in this area. 
State Ownership and Privatization 
11. Discussions also took place on progress in the Russian Federation's privatization programme 
and plans to retain State ownership in certain en terprises or sectors.  The Russian authorities recalled 
that the Basic Provisions of the State Privatiza tion Programme" stipulated that: "Foreign investors 
may participate in the privatization of trading, pub lic catering, and consumer service facilities, as well 
as small companies in industry, the construction sector , and on auto transport, only by a decision of 
local authorities or agencies duly au thorised thereby".  Decisions on inclusion of other sectors were 
taken by the Government of the Russian Federa tion or, from time to time, by the governments of 
republics within the Russian Federation. Several questions by Working Party members focussed on 
bankruptcy or enterprise dissolution provisions in Ru ssian legislation. A detailed report was requested 
on Russian firms remaining under Government contro l, the nature of goods they consumed, exported 
or distributed and on plans to complete the priva tization process.  Discussions also took place, and 
many questions were raised, regard ing the privatization programme in agriculture.  In this regard, the 
Russian authorities noted that state farms' had been  privatized by being transferred to the former 
employees free of charge, based on Article 12 of the Constitution of the Russian Federation.  
12. It was confirmed that the Russian Government was prepared to provide further information on 
the privatisation programmes. It was highlighted that, to ensure full tr ansparency, the Russian 
Federation should keep WTO Members regularly in formed about progress in privatization and 
provide periodic reports on developments in econom ic reform issues as related to WTO obligations.  
This information should describe how privatizati ons are taking place and the relative importance of 
state-owned industry in national employment and tr ade.  I note in this regard the position of the 
Russian Federation that privatization should not be  considered relevant to agreeing the terms of 
Russia's accession to the WTO and the emphasis placed by some members on agreeing appropriate multilateral commitments. 
Pricing Policies 
13. The Working Party also examin ed the Russian Federation's progress on price liberalization 
and the extent of any remaining controls on pri ces for goods and services.  The Russian authorities 
noted that pricing policy in the Russian Federation was aimed at expanding free market pricing.  The 
only major exception to this policy was pricing by natural monopolies.  In this connection the 
Government of the Russian Federation regulated prices for goods and services supplied by natural 
monopolies including natural gas, electric and thermal energy, pumping, transhipment and storage of 
oil, railway transportation, and products purchased  exclusively or mainly by the State (defence 
products, precious metals and allo ys).  Federal government agencies also approved and controlled 
fixed prices for all kinds of precious metals.  Fixed prices were also established for certain postal and electronic communications services, as well as for rail and other transport, except where competing 
groups of carriers were involved (suc h as air, road and river transport services).  Regional government 
agencies regulated prices for products and services  charged by local natural monopolies.  It was 
further noted that any goods and services subject to  State price controls or changes regarding existing 
price controls would be listed in the Ru ssian Federation's official journals.   WT/ACC/SPEC/RUS/15 
Page 6  
 
14. Following this discussion, it was generally fe lt that further information was required on 
progress of price liberalisation in the Russian Fede ration, particularly on provisions concerning border 
charges and conditions under which the authority to control prices was actually exercised at different 
administrative levels.  Information was particularly sought on the functioning of current price controls 
(e.g. whether the prices were legally mandated, or profit controls or limits existed on price increases, 
and at what point of sale for domestic and importe d goods) with the objective of agreeing enforceable 
multilateral commitments in this area. 
Competition Policy 
15. The Working Party undertook a detailed examina tion of the Russian Federation's competition 
policy, including the provisions of the legislation on competition policy and the extent of the authority 
of the Ministry of the Russian Federation for An timonopoly Policy and Support of Entrepreneurship 
to regulate competition in the economy in the Russian  Federation.  The Russian authorities described 
the pro-competition policy framework developed by  the Government as well as the key laws 
governing competition policy: in cluding the Federal Law "On Competition and Restriction of 
Monopoly Activity on Commodity Markets" of 22 March 1991 (as amended on 24 June 1992 and 25 
May 1995) and the Federal Law "O n Consumer` Right Protection" of  7 February 1992 (as amended 
on 2 June 1993).  The Russian legislation introdu ced controls on cartels, abuse of dominant position, 
economic concentration, mergers and acquisitions.  The legislation also dealt with unfair competition 
and unfair advertising.  The responsible ministry  was the Ministry of the Russian Federation for 
Antimonopoly Policy and Support of Entrepreneurship.  The Working Party considered that further 
information and  detailed discussions were re quired on this subject.   
FRAMEWORK FOR MAKING AND ENFORCING POLICIES 
16. Detailed discussions took place on the lega l and executive structure of the Russian 
Federation, focussing on the hierarchy of legislativ e instruments, the separation of powers and the 
competencies of the Federal and sub-Federal Govern ments. The possible implication for foreign trade 
policy of the recent Presidential decision introduci ng seven administrative regions covering the entire 
territory of the Russian Federation was also discusse d.  The Russian authorities confirmed that foreign 
trade activity in the Russian Federation was regulat ed by the Constitution of the Russian Federation, 
federal laws and other legal acts of the Russian  Federation, and also by generally recognised 
principles and rules of international law and by in ternational treaties to which the Russian Federation 
is a party.  The Federal Law No. 157-FZ of 13 Oc tober 1995, "On State regulation of Foreign Trade 
Activity" charged inter alia  the federal authorities with the responsibility to form the concept and 
strategy for the development of foreign trade relations  and the basic principles of foreign trade policy, 
to ensure economic security and protection of the economic sovereignty and ec onomic interests of the 
Russian Federation, as well as the economic interest s of the subjects of the Russian Federation to 
conclude international treaties in the foreign econom ic sphere.  Article 72 of the Constitution provided 
for coordination between federal and regional authorities in the area of international and foreign 
economic relations, and permitted the subjects of the Russian Federation to secure their own interests 
in this field. Federal Law No 4-FZ of 2 Decemb er 1998, "On co-ordination of international and 
foreign economic ties of the subjects of the Russian Federation", provided the regions inter alia  with 
the right to negotiate and concl ude agreements with their partne rs on international and foreign 
economic ties. Such agreements cannot, however, c ontradict federal legislation or international 
commitments assumed by the Russian Federation. The law obliges the sub-fe deral entities to notify 
their intentions, if any, to enter into negotiati ons with foreign entities to the appropriate federal 
authorities.  It also sets forth a procedure of prio r approval by the Federal G overnment of agreements 
entered into by sub-federal authorities.  Agreemen ts concluded by subjects of the Russian Federation 
are not to be considered international treaties valid for the Russian Federation.   It was noted that the 
multilateral commitment generally required in this regard was to ensure that WTO inconsistent 
measures would be overruled in every case.    WT/ACC/SPEC/RUS/15 
 Page 7 
 
 
POLICIES AFFECTING TRADE IN GOODS 
Trading Rights 
17. Under this subject, discussions centered on the fr eedom of Russian and foreign nationals to 
engage in foreign and domestic economic activity.  The Russian authorities noted that the previous 
state foreign trade monopoly had been eliminated by the Decree of the President of the Russian 
Federation No. 213 of 15 November  1991, "On Liberalization of Fore ign Economic Activity on the 
Territory of the Russian Federation", under which a ll enterprises were given the right to carry out 
foreign economic activities, whatever  their form of ownership.  Th e Decree permitted all enterprises 
registered within the Russian Federation to unde rtake foreign economic activity, regardless of the 
form of property and without any special permission.  Trading rights on the territory of the Russian 
Federation had been further liberalised by the en actment on 13 October 1995 of the Federal Law "On 
the State Regulation of Foreign Trade".  Detaile d questions were asked on the effects of the 
implementation of that law.  It was also felt that a discussion of the relationship between the right to trade and the Russian Federation's licensing requireme nts on imports was warranted under this topic.  
Reference should also be made to previous re quirements that import and export contracts be 
registered.  Current requirements for commercial regi stration should also be addressed.  It was also 
noted that a commitment was required in this area. 
Market Access Negotiations 
18. As the discussions in the Working Party a dvanced, in March 1998 the Russian Federation 
made available its initial market access offer in Goods to members of the Working Party.  Concern 
was expressed concerning both the method used in ta bling this initial offer and the level of proposed 
bindings therein. The absence of corresponding applie d rates was mentioned as well as the length of 
the proposed phasing periods. Following initial bila teral contacts, the Russian Federation has made 
available the list of current applied rates and also  tabled a revised market access offer in goods in 
February 2000.  Bilateral contacts continue on that basis.  
1. Import Regulations 
Customs Tariffs 19. During discussions on this item, the Russian authorities provided information on the steps 
taken towards bringing Russia's tariff into conformi ty with the Harmonized System administered by 
the World Customs Organization (WCO).  Details of Russia's current customs import tariff were contained in Resolution No. 1560 of the Russian Government dated 27 December 1996.  Discussions 
focussed on increases of tariff rates applied on cer tain items, including seasonal agricultural tariffs 
such as those on sugar, introduced by the Russian authorities in recen t months.  Members were also 
interested in receiving information on the draft Cu stoms Code under discussion in the Duma in 2000.   
Other Duties and Charges 
20. Work on this item resulted in the confirmation by the Russian authorities that all duties and 
charges other than the ordinary customs duties, re ferred to in Article II (b) of the GATT 1994, would 
be bound in the Russian Federation's goods schedule. Th e exact level still remained to be determined.  
It was felt that a more comprehensive factual descr iption of the Russian Federation's currently applied 
duties and charges other than ordinary custom s duties was required to agree a multilateral 
commitment in this area. WT/ACC/SPEC/RUS/15 
Page 8  
 
Fees and Charges for Services Rendered 
21. In response to requests the Russian authorities agreed to submit detailed information on fees 
and charges for services rendered to importers to enable the Working Party to undertake a detailed 
discussion on this subject.  
Application of internal taxes to imports  
22. See paragraph 7 above.  
 Excise Taxes 
23. Discussion on this item centered on the differentia l application of excise taxes to imports as 
between non-CIS and CIS countries.  Information w as also requested and questions posed on the 
application of excise taxes on specific domestic and imported products, including  alcoholic beverages, 
and the consistency of existing practice with national treatment obliga tions under the WTO.  
Subsequently, the representative of the Russian Federation informed the Working Party that the 
concerns raised in relation to the differential a pplication of indirect taxes to imports would be 
remedied in the year 2000 through the new Tax Code .  Discussions also revealed that the Federal Law 
On Excises, which entered into force on 10 January  1997, unified excise tax rates for imported and 
domestic products, though jewellery, gasoline,  and motor vehicles remained subject to ad valorem 
rates.  However, the formula applied for calculati ng excise taxes was such that the amount levied on 
imports and on comparable domestic products was the same.  Proposed le gislation in this field would 
need to be further examined by the Working Party.  
 Value-Added Tax 
24. Discussions also took place on the application of value-added tax, including product and user-
specific exemptions, equal treatment for imported and domestic products, and the calculation of VAT 
on motor vehicles.  The Russian authorities confirme d that VAT would be applied uniformly to all 
imports, including CIS countries, from the year 2000.   Proposed legislation in this field would also need to be further examined by the Working Party.  
Quantitative Import Restrictions, including Prohibitions, Quotas and Licensing Systems 
25. During discussions on the Russian Federation's system of import licensing, the Russian 
authorities informed the Working Party that G overnment Resolution No. 1299 of 31 October 1996 
had established a new framework for application of import licensing.  Russian authorities considered 
the new system fully consistent with the relevant  provisions of the GATT 1994 and the Agreement on 
Import Licensing Procedures. The Working Party expr essed concern that in certain circumstances the 
conditions of sale of imported pr oducts continued to be incons istent with the WTO's national 
treatment requirements. Recent import prohibitions on alcoholic beverages, such as those provided for 
in Federal Law No.61-FZ "On Temporary Ban on Et hyl Alcohol Imports" of 31 March 1999 (valid 
until 1 January 2002), and similar restrictions on other imports were also discussed and questions 
were raised on the legal justification and dura tion of such measures.  The Russian authorities 
continued to stress the temporary nature of the measu res.  It was considered that further clarification 
was needed, notably on those licensing restricti ons and requirements not c onsidered justified under 
WTO provisions with a view to agreeing multilateral commitments in this area.  WT/ACC/SPEC/RUS/15 
 Page 9 
 
 
Customs Valuation 
26. Discussion on the Russian Federation's custom s valuation régime ranged over several 
meetings and centered on current a nd future legislative provisions and their consistency with WTO 
rules, particularly the Agreement on the Implem entation of Article VII of the GATT 1994.  The 
Russian authorities explained that  current custom s valuation practices in Russia were governed by 
Federal Law No.  5003-1 of 21 Ma y 1993, "On Customs Tariff", and, adopted in accordance with 
Article 12 of this law, the Re solution of the Government of the Russian Federation No. 856 of 
5 November 1992, "On the Procedure of customs valu ation of products imported into the territory of 
the Russian Federation". The Law On Customs Tariff  stipulated rules for determining customs value 
which were consistent with the provisions of the Agreement on Implementation of Article VII of the 
GATT 1994, including those provisions governing the use of the methods for determining the 
transaction price of imported products.  It was not ed that legislative acti on was foreseen by the 
Russian authorities in this area and that continuing in formal technical work was important in order to 
arrive at appropriated multilaterally agreed commitm ents concerning the conformity of the Russian 
system with WTO requirements.  It was also stressed  that progress in this field was essential to ensure 
any meaningful negotiations on market access.  
Other Customs Formalities 
27. Work centered on the question of the Russian  Federation's customs formalities and their 
consistency with WTO provi sion.  In this connection, the Russi an representatives stated that customs 
formalities in the Russian Federation were in accord ance with internationally accepted rules and were 
based on the Kyoto Convention.  The Russian Federation had been a member of the World Customs 
Organisation since 1990.  The Working Party was informed that fees for customs clearance were 
currently charged at a fixed rate of 0.15 per cent of the customs value.  A fee ranging from 
0.002-0.004 ECU per kilo, plus 3 ECU per vehicle,  was payable if storage warehouses were used.  
Revenue accruing from these fees was spent entirely on enhancing the functioning of the customs 
services provided.  Modalities were being contemplated for putting in place a fee collection system in 
line with WTO requirements.  The Russian authorities stated that a certain period of transition would 
be required to put the new regime in place.  The Working Party felt that detailed action plans were 
necessary for members to examine an y request for transition periods.  In addition, it was noted that 
customs user fees must, in every case, reflect the cost of services rendered in keeping with WTO 
rules. 
Preshipment Inspection 
28. During discussion on this item, the representative of the Russian Federation stated that his 
Government did not currently engage private comp anies to carry out preshipment inspection.  The 
Working Party felt that the responsibility of th e Russian Government for compliance with WTO 
provisions by any entity engaged in preshipment inspection should be clearly determined.  The objective is that of agreeing enforceable multilateral commitments in this area.   
Rules of Origin 
29. Discussion focussed on the provisions of the Fede ral Law "On Customs Tariff", which set out 
rules of origin for goods imported into the Russian Federation.  The Russian authorities stated that the 
rules were designed to help identify the country of origin in accordance with criteria set forth in the 
said Law.  The Working Party examined in detail th e different criteria governing the determination of 
origin, the formalities connected with the issue of  the required certificate, and the circumstances in 
which the customs authorities could refuse to process a customs entry when origin was in dispute. 
Further technical work was deemed necessary to gain a more precise understanding of any possible WT/ACC/SPEC/RUS/15 
Page 10  
 
WTO inconsistencies resulting from the system in place.  The objective is to ensure that the WTO 
Rules of Origin provisions were in place upon accession. 
Anti-Dumping, Countervailing Duties, and Safeguard Régimes 
30. The Working Party was informed that a Federa l Law No. 63FZ, "On Measures to protect the 
Economic interests of the Russian Federation in Foreign Trade in Goods", had been enacted on 14 
April 1998.  The Law established the procedures for the application and the imposition of safeguards, 
anti-dumping and countervailing measures as well as all other regulations concerning exports and 
imports provided for in the relevant rules of GATT 1994, including measures taken for balance of 
payments purposes.  Discussions centered on the conf ormity of the law with the requirements of the 
WTO Agreement on Implementation of Article VI  of the GATT 1994, the Agreement on Subsidies 
and Countervailing Measures, the Agreement on Safe guards as well as on the provisions of Article I, 
XII and XX of GATT 1994.  The Russian authorities informed the Working Party that the Law was 
expected to be amended in compliance with WTO ru les and disciplines in the year 2000.  It was noted 
that continuing informal technical work, including the examination of any future relevant draft 
legislation, was important in order to arrive at  a commonly shared multilate ral assessment regarding 
the conformity of the proposed Russian system with WTO requirements.  
2. Export Regulations 
Export Restrictions 
31. Under this item, work centered on the Russian Federation's continuing liberalization of the 
remaining export restrictions, licences and export duties.  The Russian authorities explained that 
export liberalization had been carried on through a number of Government Resolutions: Government 
Resolution N°300 of 21 March 1996, Government Resolution N° 479 of 1 April 1996;  Government 
Resolution N° 413 of 11 April 1996;  and Governme nt Resolution N° 1299 of 31 October 1996.   
32. During further discussions, the Russian authorities argued that the remaining export quotas 
were applied pursuant to the Russian Federation's in ternational obligations an d were consistent with 
the relevant WTO provisions. The Working Party str essed, however, that export controls remained an 
important concern. Further clarification was require d on the modalities used to give effect to the 
measures currently in place.  Information and clarific ation is also needed on the introduction, in 1999, 
of export tariffs on a wide range of products.   
Export Subsidies 
33. Information was sought about export subsidy pr actices, including tax.  Detailed information 
was submitted on regional subsidy practices.   (See also paragraph 34 below). 
3. Internal Policies Affecting Foreign Trade in Goods Industrial Policy, including Subsidies 
34. Under this item, the Working Party focussed on examining detailed in formation submitted by 
the Russian Federation on subsidies, tax incentives related to exports, and, in particular, detailed 
information relating to regional subsidy programmes.  Detailed ex amination took place of various 
categories of subsidies, including direct transf ers from the federal budget; budget loans; delayed 
payments to the federal budget (related primarily to energy sector subsidies); investment tax credits; 
specific forms of federal assistance;  subsidies to the regions; and financing of specific state programmes.    WT/ACC/SPEC/RUS/15 
 Page 11 
 
 
35. During work on this item, the Working Party not ed the need for more precise and detailed 
information on subsidies, including further considera tion of the categorization of subsidies paid to 
certain industries and the lack of statistical data re quired to fully evaluate the effect of subsidies on 
trade.  
Technical Barriers to Trade 
36. Discussions under this item were  detailed and ranged over sever al meetings.  Substantial 
concerns were registered in relation to the curre nt operation of the Russian Federation TBT system.  
The Russian Federation was requested to identify the precise means by which it planned to conform to 
WTO disciplines in this area, and invited to pr esent the Working Party with regular updates on 
relevant legislative developments.  Discussions also focussed on the evolution of the Russian TBT 
system into one that reflected more  fully international standards and practices.   In the course of the 
discussions the Russian authorities noted that the fe deral authority responsible for TBT matters was 
the State Committee of the Russian Federation for Standardization, Metrology and Certification 
("Gosstandart of Russia").  Discussions took pl ace on the work of Gosstandardt, the progressive 
harmonisation of Russian standards with ISO and IEC standards, as well as on the need for a 
streamlining of conformity assessment requirements in line with the principles of proportionality and 
least trade-restrictiveness and on the operation of the Russian Federation's enquiry point, which had 
been recently established. It was noted that further informal technical work was necessary in order to 
arrive at a shared multilateral assessment of th e conformity of the Russian system with WTO 
requirements so that enforceable multila teral commitments could be agreed. 
Sanitary and Phytosanitary Measures 
37. Under this item, discussions centered on th e requirements for hygienic certification of 
imported food, certain types of industrial produc ts and household items.  The Russian authorities 
noted that the responsible agency was the Ministry  of Health of the Russian Federation (Department 
of Sanitary and Epidemic Surveillance or "Go ssanepidnadzor").  The requirements for safety, 
nutrition value and labelling of food products were contained in Re gulation 5061-89 of the Ministry 
of Health dated 1 August 1989, "O n Medical and Biological Requirements for Quality of Food and 
Food Components", which had been substantially revised, taking into account provisions existing 
within the framework of relevant international organisations, i.e.  FAO/ WHO Codex Alimentarius 
Commission. The procedure for hygienic certification was set out in Regulation No. 1 of the Russian 
Gossanepidnadzor, "On The Procedure Of Issuing Hygienic Certificates For Products", dated 5 January 1993.  This Regulation had been prepared on the basis of the following Laws of the Russian 
Federation: Law No 52-FZ "On Sanitary And Epidem iological Welfare Of The Population" dated 30 
March 1999; Law No 2-FZ "On The Protection Of Consumer's Rights" dated 9 January 1996; 
Fundamentals of the Legislation of the Russian Fe deration No.  5487-1 "On Health Protection" dated 
22 July 1993; Law No.  5151-1 "On Certification Of Products And Services" dated 10 June 1993; and, 
Law No.  2060-1 "On Protection of the Natura l Environment" dated 19 December 1991.   
38. Questions were posed concerning the requirement of veterinary control of importation of live 
animals and imported products of animal origin.  The responsible agency was the Ministry of Agriculture and Food (Department of Veterinary Control).  Discussions focussed on the process for 
obtaining an import permit and hygienic certificat e (subsequently abolished in 1998), as required by 
the Law of the Russian Federation "On Veterinary C ontrol" dated 14 May 1993.  In addition, imports 
of animals or animal products also required a ve terinary certificate issued by the exporting country, 
recognised by the Department of Veterinary Control.  It was noted that continuing informal technical 
work on the subject matter of sanitary and phytosanita ry measures was important in order to arrive at 
a shared multilateral assessment of the conformity of the Russian system with WTO requirements so 
that enforceable multilateral commitments could be agreed. 
Trade-Related Investment Measures (TRIMs) WT/ACC/SPEC/RUS/15 
Page 12  
 
39. Under this item, the representative of the Russi an Federation maintained that the Russian 
legislation in force contained no trade related invest ment measures inconsistent with the requirements 
of the Agreement on TRIMs.  Questions remained in  particular regarding the possible discriminatory 
nature of certain provisions in force, notably in  the Federal Law on Production Sharing Agreements, 
the extent to which Russia intended to ensure th at the TRIMs Agreement will also be observed at 
sub-federal level, and provisions tying waiver s of customs duty on imported aircraft to 
purchase/leasing of Russian-made equivalent aircraft.  It was noted that certain recent developments 
would require a further review of this subject by the Working Party.  
State-Trading Enterprises 
40. Under this item, it was noted that a sizeable part of the Russian Federation economy remained 
in State ownership and had been subject to Stat e monopoly.  Under Article XVII of the GATT 1994, 
the Russian Federation was requested to notify any de facto  or de jure  trade monopoly and trade 
activities of any State-owned firm benefitting from selective support or subject to State intervention. 
In response, the Russian Federation informed the Wo rking Party that five entities currently existed in 
the Russian Federation which could meet the de finition of State-trading enterprises under WTO 
provisions.  These entities were limited to the energy  (three) and raw natural diamond (two) spheres.  
Beyond the five notified enterprises, it was claimed that no entities carried special or exclusive trading 
rights in the Russian Federation.  The Russian au thorities intended to introduce further reforms in 
these sectors and confirmed that any present or futu re trading activities of State-owned enterprises and 
other enterprises with special and exclusive rights w ould in all circumstances act in full conformity 
with the provisions of the WTO Agreements.  Th e Russian Federation would continue to notify any 
enterprise falling within the scope of Article XVII of the GATT 1994.  
41. During discussions on the activities and possible privileges of UES of Russia and Gazprom, 
the Russian Federation authorities stated that both entities conducted their operations with regard to 
commercial considerations in the sense of relevant  WTO provisions.  Rosugol was no longer a state-
trading organisation as its regulatory functions had b een charged to the Federal Ministry of fuel and 
energy and its economic and commercial functions had been transferred to joint stock companies 
which operate on market principles.  Further discussi ons examined the role of the Federal Agency for 
Food Market Regulation (subsequent ly abolished in 1998), and its role in the monitoring of 
agricultural product markets, promotion of competition, arranging commodity purchases in the agricultural market and acting as a state customer (p rocuring organisation) to maintain the current 
food reserves of the Russian Government. 
42. Concern was nevertheless expressed that so far only partial adjustments had been introduced 
in the regulatory framework for government procurem ent (see also paragraph 44 below). It was noted 
that continuing work was important in order to a rrive at a better understanding of the activities of 
these entities and a shared multilateral assessment rega rding the conformity of the Russian practices 
in this field with WTO requirements so that en forceable multilateral agreements could be agreed. 
Free Zones, Special Economic Areas 
43. During work under this item, the Russian authorities noted that although Russian law 
provided for the establishment of free-trade zones,  such zones had not become significant to the 
Russian Federation's trade régime.  Concerning Special  Economic Zones,  pursuant to Article 7 of the 
Federal Law On the Special Economic Zone in the Kaliningrad Region, all goods (including 
agricultural products) imported into the Kaliningrad  Region were exempted from customs duties.  But 
if such goods are later exported to other regions of  the Russian Federation, customs import duties are 
payable in full, with the exception of goods process ed and deemed to have been processed in the 
Kaliningrad Region.  The Working Party remained concerned with the difficulty of assessing actual or 
potential trade distortions caused by current practic es relating to the operation of these free zones or 
special economic areas.  WT/ACC/SPEC/RUS/15 
 Page 13 
 
 
Government Procurement 
44. Under this item, the Working Party examined wh ether the Russian Federation intended to join 
the Agreement on Government Procurement.  The re presentative of the Russian Federation noted that 
the Russian Federation would not consider join ing the Government Procurement Agreement.  
Members remained keen to pursue negotiations on this matter and sought a mutually satisfactory 
solution.  The Russian authorities noted that government procurements were regulated by the Civil 
Code, by the Federal Law "On purchases goods fo r federal needs", Federal Law No. 97-FZ "On 
Tenders for the Placement of Orders for the Suppl y of Goods, Performance of Works, Provision of 
Services for State Needs", dated May 6, 1999 and a number of Presidential decrees and Government 
resolutions.  Moreover, on 8 April 1997 the decree of the President of the Russian Federation No. 305 
"On the priority measures for prevention of corru ption and reducing the budgetary expenses in the 
organisation of the purchase of products for the stat e needs" had been adopted.  Discussions focussed 
on the invitation process, the examin ation of bids, the notification of award of contract, liability for 
loss, and the process of appeal of the decision of the examining agency. (See also the remarks 
contained in paragraph 42 above).   Some members felt that further information was necessary to 
clarify existing practices with a view to  agreeing a commitment in this area. 
Transit 
45. Under this item, the Working Party focussed on th e conditions of treatment of goods in transit 
through the territory of the Russian Federation,  in particular documentary and administrative 
requirements, and the consistency thereof from region to region of the Russian Federation, differential 
charges for CIS and non-CIS products and carriers an d difficulties related to the processing of refunds 
of duty paid as security upon the end of the transit.   
Agricultural Policies 
46. Brief discussions took place on this item in formal meetings of the Working Party.  It was 
agreed that further technical work needed to be carried out in an informal plurilateral setting with 
interested Working Party members in order to agree a commonly shared methodology on which 
enforceable multilateral commitments could be based.   
Trade in Civil Aircraft 
47. Discussions on this item centered on whether the Russian Federation would accede to the 
Agreement on Trade in Civil Aircraft at the time of accession without exceptions or transition periods. 
Some members felt that further clarification and in formation was required with a view to agreeing a 
commitment in this area. 
Trade Related Aspects of Intellectual Property Rights (TRIPS) 
48. Discussions on this item ranged over several meeti ngs of the Working Party.  In particular, 
work focussed on details of legislation and enforc ement of intellectual property rights protection in 
the Russian Federation and the compatibility with requirements of the TRIPS Agreement.  Detailed 
discussions took place on the relationship between th e current Federal system of protection of 
intellectual property rights with the basic inte rnational standards in this field including inter alia  the 
provisions of the TRIPS Agreement.  
49. The Russian authorities stated that the genera l thrust of the Russian Federation's policy on 
intellectual property was determined by the Constitu tion of the Russian Federation (Article 44-1) 
which guaranteed freedom of literary, artistic, scientif ic, technical and other types of creative activity, 
and teaching, and stipulates that the intellectual property shall be protected by law. The Russian 
Federation extended national treatment to legal entitie s and individuals of those countries which were WT/ACC/SPEC/RUS/15 
Page 14  
 
parties to agreements mandating such treatment.  The application of most-favoured-nation treatment 
(with exceptions regarding advantages granted by the Russian Federation in accordance with certain 
agreements including agreements with CIS countri es) on intellectual property was stipulated in 
several bilateral agreements.   
50. It was noted that specific deficiencies existed in the current Russian legislative framework in 
this area.  Discussions focussed on copyright and re lated rights (particularly on the requirements of 
the Berne and Rome Conventions); trademarks, including service marks; geographical indications, 
including appellations of origin; inventions and indu strial designs; patents; plant varieties and animal 
breed protection;  layout designs of integrated ci rcuits; protection of undisclosed information and the 
enforcement thereof.  The Working Party requested  information on the precise means by which the 
Russian Federation proposed to conform to WTO disci plines in this area. In addition, the continuing 
need for information concerning legislative devel opments, including draft legislation expected to 
implement TRIPS norms in the Russian Federation was also stressed.   
POLICIES AFFECTING TRADE IN SERVICES 
51. Discussions in this area were considerably delayed by a lack of systemic information 
available to the Working Party.  Finally, in Oc tober 1999 the Russian Federation made available a 
market access offer in Services to members of the Working Party and a preliminary discussion began 
at the May 2000 meeting.  Concern was expressed regarding the large number of horizontal limitations on market access, and the proposed num ber of MFN exemptions contained in the offer. 
TRANSPARENCY 
Publication of Information on Trade 
52. Under this item the Working Party examined the manner in which laws and other decisions 
related to trade in goods and services were made pub licly available, particularly in the context of 
Article X of the GATT 1994.  The Russian Government enacted legislation requiring that all laws and 
normative acts related to trade woul d be published promptly in the official journal and that no law or 
rule related to international trade would become eff ective prior to such publication.  It was felt that 
further clarification was required with a view to  determine enforceable multilateral commitments 
required by WTO agreements. 
Notification 
53. Under this item, the Russian authorities confir med that the Russian Federation would provide 
all notifications required pursuant to WTO Agreemen ts.  It was also felt that an enforceable 
multilateral commitment was required in this area. 
TRADE AGREEMENTS 
54. During discussions on this item, the Working Party focussed on the Russian Federation's 
preferential agreements, particularly with countries of  the former Soviet Union.  It was noted that, 
currently, the Russian Federation had bilateral ag reements on trade and ec onomic co-operation with 
138 countries. 126 of those agreements contained provisions on MFN treatment.  Article 3 of the 
Partnership and Co-operation Agreement with th e European Communities provided for the possible 
establishment of a Free Trade Area.  Bilateral ag reements on free trade with other CIS countries, 
permitting the importation of any go ods (including agricultural pr oducts) originating from CIS 
countries into the customs territory of the Russi an Federation without the payment of duties was 
discussed.  Those free trade agreemen ts also applied to trade relatio ns between the Russian Federation 
and the three Republics of Uzbekistan , Turkmenistan, and Tajikistan.   WT/ACC/SPEC/RUS/15 
 Page 15 
 
 
55. Discussions were also undertaken on the framewo rk agreements signed between the Russian 
Federation and Belarus, Kazakstan and Kyrgyz Republic in 1995-1996 which provided for the step-
by-step formation of a customs union.  The Russian  authorities noted that the formation of such 
customs union was in the initial stag e, while trade with these countri es was currently carried out under 
the conditions of a free trade regime, without any limitations or restrictions. The Working Party 
generally felt that more detailed in formation was required on this matter,  particularly in view of the 
ongoing bilateral market access negotiations. 
Next steps 
56. Finally, at the Working Party meeting of 25 May 2000, the last under my chairpersonship, it 
was agreed that the Working Party would reconvene  informally in October to take stock of the 
progress in the finalisation of key legislation, in cluding the Customs and the Tax Codes.  At that 
informal meeting, the Working Party would also fi nalize the agenda and date of the next formal 
meeting which could be expected to take place before the end of 2000.  
57. On the fringes of the October meeting, an extens ive round of bilateral and plurilateral contacts 
on market access and other subjects should also take place to give the next formal meeting of the 
Working Party sharper focus and direction.   
__________