RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/ACC/SPEC/RUS/25/Add.3 
14 June 2002 
 (02-3341) 
Working Party on the Accession 
of the Russian Federation  
 
 
 
DRAFT REPORT OF THE WORKING PARTY ON THE 
ACCESSION OF THE RUSSIAN FEDERATION  
TO THE WORLD TRADE ORGANIZATION  
 
Addendum  
 
  The Permanent Mission of the Russian Federa tion has submitted the attached supplementary 
information on State Ownership and Privatization re lating to the first draft of the Working Party 
Report on the Accession of the Russian Federa tion to the WTO (document WT/ACC/SPEC/RUS/25 
refers). 
  
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 WT/ACC/SPEC/RUS/25/Add.3 
Page 2  
 
STATE OWNERSHIP AND PRIVATIZATION 
 
1. Clarification to paragraph 23  The representative of the Russian Federation noted that the 
government privatization policy was aimed at  a structural reform of economy and 
development of its private sector by expanding th e scope of privatization; formation of budget 
revenues; minimization of federal budget costs of public property management; 
encouragement of investment in the production sector of Russian economy; improved opportunities for medium and small business partic ipation in the privatization, by means of 
diversifying the instruments of privatization of  state and municipal property; consolidation of 
real properties by means of attaching land plots to the property privatized. 
 
He also added that the privatization in the Russian Federation was based on the principles of 
transparency and predictability of privatizati on procedures, equal treatment of all purchasers 
of state and municipal properties and transparent procedures of state authorities and local administrations.  
 
2. Clarification to paragraph 24   The representative of the Russian  Federation stated that the 
Federal Law No. 123-FZ of 27 July 1997 "On Privatization of State Property and the 
Principles of Privatization of Municipal Prope rty in the Russian Federation" (as amended on 
23 June 1999, 5 August 2000) was replac ed by the Federal Law No. 178-FZ of 
21 December 2001 "On Privatization of State and Municipal Property". 
 
3. Clarification to paragraph 25  The representative of the Russian Federation explained that 
privatization planning of property owned by s ubjects of the Russian Federation and municipal 
property was determined by the government al bodies of the subjects of the Russian 
Federation and the local government bodies resp ectively. The subjects submitted the results of 
privatization of regional and municipal property to the Russian Federation Government or the 
appropriate federal executive authority in a report on an annual basis. The program of 
privatization of federal property, completion and status reports, decisions establishing the 
terms of privatization of state or municipa l property under the program were subject to 
official publication. 
 
4. Clarification to paragraph 26 and 27  The representative of the Russian Federation 
informed that pursuant to Federal Law No. 178-FZ of 21 December 2001 "On Privatization of 
State and Municipal Property", the property cl assified under federal la ws as a non-alienable 
object of civil rights (an object exempt from a lienation) (natural resources, budgetary funds, 
defense facilities and objects, sanitary and epidemiological services, etc.) and also the 
property that could only be in state
. or municipal ownership in the manner established by 
federal laws could not be privatized.  
5. Clarification to paragraph 28 and 30  In response to the request of some members, the 
representative of the Russian Federation stated that Federal Law No. 178-FZ of 21 December 2001 "On Privatization of State a nd Municipal Property" did not itself contain 
any restricting provisions for foreign particip ation in privatization, but required mandatory 
compliance with the restrictions established by other legal acts. The State Program of Privatization of State and Municipal Enterp rises in the Russian Federation (approved by 
Decree No. 2284 of 24 December 1993 of the President of the Russian Federation) provided that the Russian Federation Government and governments of the subjects of the Russian 
Federation were entitled to defi ne the terms of foreign inv estor participation in the 
privatization of facilities and objects of defe nse industry, oil and gas industry, mining and 
processing of ores of strategic materials, precious and semiprecious stones, precious metals, radioactive and rare-earth minerals, certai n objects and facilities in transportation and  WT/ACC/SPEC/RUS/25/Add.3 
 Page 3 
 
 
communications (federally owned and privatized  at a decision of the Russian Federation 
Government), when making the decision on pr ivatization. In each instance a regulatory legal 
act should be adopted. According to the State Pr ogram of Privatization of State and Municipal 
Enterprises in the Russian Federation, the priva tization decision and authorization of foreign 
participation for retail and wholesale enterprises,  public catering and consumer services, as 
well as of small enterprises in industry, constr uction, and automobile transportation were to 
be made by local administrations. Privatization of state property maintained by the subjects of 
the Russian Federation and of municipal prope rty was governed by the Russian Federation 
legislation on privatization. 
 
6. Clarification to  paragraph 31 and 32  The representative of the Russian Federation stated 
that 137,762 enterprises were privatized betw een 1992 and 2001.  He also provided an update 
on the pattern stated in Tables 1 and 2: 
 
Table 1:  Progress in Privatization of Enterprises of State and Municipal  
Ownership within 1993-2001  
 
Year 1993 1994 1995 1996 1997 1998 1999 2000 2001 
Number of privatized 
enterprises of state and municipal 
ownership 42,924 21,905 10,152 4,997 2,743 2,129 1,536 2,274 2,287
Including those by the form of property 
Federal 7,063 5,685 1,875 928 374 264 104 170 125
Subjects of the 
Russian Federation  9,521 5,112 1,317 715 548 321 298 274 231
Municipal 26,340 11,108 6,960 3,354 1,821 1,544 1134 1830 1,931
 
Table 2:  Progress in Privatization of Enterpri ses of State and Municipal Ownership concerning 
specific areas of activity within 1993-2001  
 
Area of activity 1993-2001 
Industry 
- electric energy 21,915 
194 
Agricultural Sector 1,842 
Transport  
- railway  - auto road  
- pipeline  
- maritime transport - internal waterways  
- air transport  
- loading, unloading and expeditious services 3,242 
57 
2,529 
5 
44 
104 
67 
93 
Communications  Construction  
Wholesale trade 
Retail  trade Public catering 
Housing and related services  
Services to the population  Health care and other types of social care  
Public education  
Culture and art  Science  
Other areas of economy 206 
8,182 
1,653 
25,505 
5,137 
3,037 
1,940 
356 
278 
331 654 
16,669 WT/ACC/SPEC/RUS/25/Add.3 
Page 4  
 
Area of activity 1993-2001 
Total 90,947 
  
7. Clarification to paragraph 35  The representative of the Russian Federation advised that 
according to the national statistics, in 2001, the public sector enterprises (state unitary 
enterprises and joint-stock companies more than 50 per cent owned by the state) in all sectors 
of economy accounted for 13.4 per cent of th e total production of goods and services, 
9.7 per cent of the total industrial producti on and services, and 13.2 per cent of the total 
agricultural production.  
  
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