RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/ACC/SPEC/RUS/31 
20 February 2003 
 (03-1084) 
Working Party on the 
Accession of the Russian Federation Original:   English 
 
 
 
ACCESSION OF THE RUSSIAN FEDERATION 
 
 Attached is a consolidated list of comments, proposals and requests for specific information or clarification, together with the Russian Federation responses, emanating from 
the revised draft of the Working Party Report (document WT/ACC/SPEC/RUS/25/Rev.1 refers) 
relating to issues which will be taken up at the Working Party meetings scheduled for the week beginning 3 March 2003.  For ease of reference comments relating to these issues and already circulated in document WT/ACC/SPEC/RUS/30
1 are reproduced hereunder. 
 
 
 
                                                      
1 Italicised text refers to comments previously circulated in document WT/ACC/SPEC/RUS/30. WT/ACC/SPEC/RUS/31 
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Paragraph 
No. Comment 
General 
At the conclusion of the meeting of the Working Party on 30 January 2003, the Chairman 
invited members to submit further written inputs in terms of specific points of clarification needed to flesh out the draft Working Party report and drafting suggestions both of a technical and substantial nature.  As in the preparation for the January Working Party meeting, these 
contributions, along with points of concern that have emerged in Russia’s bilateral contacts 
with WTO Members, would then provide the guidelines for the new inputs required from Russia in order to prepare discussions in the next meeting of the Working Party in early March.  
The Chairman also proposed that the focus of attention at the March meeting of the Working 
Party should be on the sections and chapters of the draft report that deal with Policies affecting Trade in Goods, with the exception of those sub-sections that concern Customs-related matters (eg customs regulations and tariff, customs duties, other duties and charges, customs fees and charges, valuation, formalities on imports and export).  
Accordingly, this present contribution focuses on the treatment of this particular group of 
issues in the draft Working Party report, in preparation for the March meeting of the Working Party. We look forward to a full response by Russia to the concerns raised by Members in the expectation that this will enable the Working Party to make significant early progress on these issues.  In all areas where Russia is taking forward relevant legislative initiatives, an update on 
progress on the enactment of legislation and information on its intended implementation should 
be provided. Needless to say, to the extent that they have not already been satisfactorily addressed in the draft Working Party report, all concerns, requests for clarification or drafting proposals previously raised or made by us on these and all other issues relevant to the accession process remain valid.  We also fully reserve the right to propose additional text for the future development of the report. 
While the new information provided by Russia in WT/ACC/SPEC/RUS/29 and WT/ACC/SPEC/RUS/30 is useful, the form of the presentation of information does not assist 
Members in taking forward the discussion of the draft Working Party report.  The structure of 
the information does not allow Members to readily assess responses to specific questions or identify where issues may have been resolved.  Furthermore, in some sections Russia has combined information on proposed legislative 
changes with existing policies.  It is unclear whether the legislative basis for existing policies 
will be repealed or will co-exist with new legislation.  We recommend that Russia augment its responses and provide them in the format of specific answers against outstanding concerns raised in the left paragraph of these documents, together 
with suggested re-drafts in relevant sections of the WP report where this is appropriate.  This 
will allow the WP to better assess those concerns/questions that have been resolved and those requiring further discussion.  This approach should assist WP members and Russia to arrive at text for appropriate commitments in the WP report. 
We look forward to full responses from Russia in relation to the issues raised in WT/ACC/SPEC/RUS/30 and would suggest that it adopt the approach of providing specific answers against each question/concern raised by Members.  WT/ACC/SPEC/RUS/31 
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Paragraph 
No. Comment 
At the January 30 meeting of the Working Party (WP), the Chairman requested additional 
inputs for certain sections of the draft WP report he identified, for review in March 2003.  Following are additional comments and questions that we believe will be helpful in developing the factual basis for further revision of the draft WP report.   
 
Based on our understanding that the main work of the March 2003 WP meeting will be to improve the factual basis of the draft report, we have limited our requests for commitment language, and reserve the right to provide these at a later time, as well as any additional comments and specific drafting suggestions that may be necessary.  In the interest of transparency, we have also submitted comments on some of the topics that will be taken up at 
subsequent meetings of the Working Party.  We request that these comments be included in a 
separate document, as was done with other such comments in WT/ACC/SPEC/RUS/30 in January.  We would also note that our previous general comments on developing the draft WP report text, reflected in WT/ACC/SPEC/RUS/29, remain part of our approach to this exercise. 
66-80 POLICIES AFFECTING TRADE IN GOODS 
Registration requirements for import/export operations 
66-80 This section will need to be revised in light of prospective new legislation, such as 
the draft Foreign Trade Law.    
Paragraphs 72 and 73 provide further explanatory material on the restrictions 
applicable for trade in pharmaceuticals and precious metals. We understand that Russia has also eliminated activity licensing for trade in precious metals and precious stones: can Russia confirm this and provide the relevant legislative citation? This information should be included in the WP report.  
 
Paragraph 74 refers to a ban on imports of pharmaceuticals by “sole domestic and foreign practitioners”. What is the scope and rationale for this?  Paragraph 80 contains an account of the views expressed by members of the 
WP, rather than draft commitments language. There is no reason for this 
paragraph to be in brackets, unless it were also converted into commitments language. 
66-80 We request that the Russian Federation provides a revised version of document 
WT/ACC/SPEC/RUS/21/Rev.1 – Reference paper 12 on Activities subject to licensing covering both goods and services as well as information on the licensing bodies, descriptions of criteria and the fees requested.  
We thank the Russian Federation for providing an example on medicines 
describing the basic administrative measures necessary for carrying out activity in the field of medicines. The information contained in that document should be included under this section.  
For clarity and transparency purposes, we suggest that the last part of 
paragraph 73 starting with “regarding importation of pharmaceuticals…” and paragraph 74 be included at the end of paragraph 72.   We have the same requests/comments as mentioned in document 
WT/ACC/SPEC/RUS/30 on paragraph 72. 
66-80 The changes made to this Section of the draft working party report generally 
have enhanced clarity, and we appreciate the effort that Russia has made to 
provide the requested information. WT/ACC/SPEC/RUS/31 
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68 Russia should respond to Members’ concern that the State Customs Committee 
representatives have recently encouraged the limitation of  the number of traders in certain products through certain customs points of entry.   If the last sentence of paragraph 72 is intended as a response on this issue, it needs to be 
expanded and clarified.  Do laws of the type described in paragraph 72 exist?  
What recourse to companies have in the face of “encouragement” to limit the number of traders? 
69 This paragraph will need updating to with reference to the new draft Law on the 
State Regulation of Foreign Trade Activity and other legislation regulating or licensing international trade activities.  
- Please include reference to the exceptions to the general rule, e.g., 
alcoholic beverages, pharmaceuticals and precious stones and metals. 
- We understand that the activity licensing requirement for the import 
and export of precious stones and metals may have been be eliminated.  Can this be confirmed? 
70 Please clarify that when registering a legal entity in the Russian Federation, the 
requirement to confirm of payment of no less than 50% of the charter capital of 
the firm is not a requirement to pay to the government 50% of charter capital.  
We do not believe this is the case, so we would appreciate clarification of this requirement. 
71-74 Please indicate if there are any other exceptions, limitations, or additional 
requirements for activity licensing or acquiring an import or export license than those listed.    
- Can access to an activity license be restricted for economic or geographic 
reasons?  If so, please identify and explain these restrictions. 
72 Para 72 states “Once a company obtained such an activity licence in all two cases 
mentioned above, it would be eligible for the receipt of import and export licenses each time it wished to import or export goods subject to licensing.”  - Is a firm that holds an activity license required to obtain an import 
license each time it wishes to import or export products?  According to 
RUS/10/Rev.1, import licenses are valid for a period of 12 months.  If a firm imports more than one time during that time period, are they able to use the same import license as long as it is valid and covers the products being shipped or is a new license application necessary?  Please clarify your use of “each time” in para 72, sentence 3. 
73 Para 73: Most of the text in this paragraph refers to export requirements.  We 
suggest that it be moved to the section on export restrictions and licensing 
requirements later in the report. 
 - Please provide information on any activity or import
 licensing applied to 
precious metals, including rare earth metals, and stones. 
73-74 Paras 73 and 74 include references to representative offices in the Russian 
Federation as able to apply for an import license and import pharmaceuticals.  We understand, however, that a foreign firm representative office may only 
import and export pharmaceuticals for promotional purposes, and not to 
conduct commercial operations.    - Please clarify the purposes for which a representative office may secure 
import and export licenses and engage in importation and exportation of  WT/ACC/SPEC/RUS/31 
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pharmaceuticals.  Can a representative office be the importer of record 
for pharmaceuticals ultimately distributed commercially in Russia?  
 - Please clarify if a firm or individual, either foreign or Russian, that is not 
registered in Russia and does not have a representative office, may be 
allowed to be the importer or exported of record in general, and 
specifically in the case of goods subject to activity licensing. 
77 Please indicate the status of the draft federal law on licenses for ethyl alcohol 
and alcohol-containing products. Please update this information to address any new procedures contemplated for the importation and exportation of alcohol and alcohol-containing products.    
- Russia should indicate how it intends to bring its import requirements 
on alcoholic beverages into conformity with WTO. 
80 We note that this statement of Members’ concerns requires some clarification. 
 RUS/25/Rev.1 needs to be revised to include an appropriate commitment responding to the request of WP members, along the following lines:  
xx.    The representative of the Russian Federation confirmed that 
foreign trade was not subject to State monopoly.   No restrictions would be applied to the rights of enterprises, including sole proprietors to import and export goods into or from the Russian Federation except as provided for in WTO Agreements.  He further confirmed that the 
criteria for registration of import and export operations were generally 
applicable and published and that these requirements were applied in a non-discriminatory manner towards importers and exporters. [The working party took note of these commitments.] 
 
xx       The representative of the Russian Federation confirmed that from 
the date of accession, the Russian Federation would ensure that its laws, regulations and other measures relating to the registration for import and export operations and all fees, charges, or taxes levied on such operations would comply fully with the Russian Federation’s WTO obligations, including Articles VIII, XI and III of GATT 1994 and that 
the Russian Federation would implement such laws, regulations and 
other measures in full conformity with its obligations. [The working party took note of these commitments.] 
66-80 We urge the  RF to submit a new revision of WT/ACC/SPEC/RUS/21/Rev.1 Reference 
Paper 12 on Activities Subject to Licensi ng  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/ex port 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 me t 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 provid ed 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 Russi a indicates significant areas where WT/ACC/SPEC/RUS/31 
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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 guar antees 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 information it has provided in the second 
draft to provide a complete description of: 
- the formalities, requirements and eligibility  criteria that need to be satisfied, 
and the relevant procedures for the applica tion 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 li censing, 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 the 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 fu lly Members’ concerns. 
69-70 The registration requirements or requirement s for activity license for imports/exports 
are set out in para 69-70 with the three exc eptions of alcohol, pharmaceuticals and 
precious stones and metals. As we underst and this, except for the three exceptions, 
the foreign participant (exporter) on the outside of the Russian border does not need an activity license. All participants within  the Russian border (importer) need an 
activity license, but this is a general activ ity 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 “natur al persons and legal entities” also includes 
foreign companies or persons.  Could Russia please clarify whether : (i) foreign 
businesses or persons have the right to partici pate in foreign trade activity in relation 
to ethyl alcohol, alcoholic and alcoholic-containing products; and (ii) whether they are, like Russian participants, required to obtain an activity licence. 
72 We suggest that the information in th e last part of paragraph 73 and in paragraph 74 
concerning restrictions on importation and exportation of pharmaceutical products 
be consolidated into paragraph 72 fo r the purposes of clarity and transparency. 
- We seek clarification in relation to the number of licences and approvals 
required to import pharmaceutical produc ts.  Is it the case that importers  WT/ACC/SPEC/RUS/31 
 Page 7 
 
 
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 “once a company obtained such an 
activity licence in all two cases mentioned above”?  
- We seek greater information in the rela tion 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 “p ermission” of the federal medicine 
control agency referred to in paragraph 74, and the import licence itself. 
- We seek clarification of the policy obj ective behind requiring the issuance of 
new export or import license for each and every instance of trade, despite the 
fact that importers have also obtained activity licences in this sphere.   
73 - We welcome the additional information 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.  Fo r example, we request clarification 
of how non-automatic licensing requirements work in relation to affinated gold, silver and natural precious stones. 
80 The commitment in paragraph 80 will ultimately be acceptable but Russia has not yet 
demonstrated that it can achieve WTO conformity in practice.  
Until the issues raised by Members on tradi ng rights are satisfactorily addressed and 
appropriate reforms enacted, we will not be ready to accept that Russia will be ready 
to maintain appropriate WTO confor mity 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 other goods in Paragraphs 71-74. 
68, 72, 79 Russian Federation:  
 
Licensing of pharmaceutical export and imports  
 
Licensing of pharmaceutical imports  
 Pursuant to the Federal Law N 86-FL “On Pharmaceuticals” as well as the federal law N 128-FL “On Licensing of Selected Business Activities” the following entities are entitled to import pharmaceuticals to the territory of the 
Russian Federation: 
 Research institutions, institutions, laboratories for development, research and control of quality, effectiveness and safety of pharmaceuticals subject to authorization of the federal pharmaceutical quality control body for import of a 
specific shipment of pharmaceuticals, as well as enterprises – pharmaceutical 
producers for purposes of own production of pharmaceuticals, pharmaceutical wholesalers and foreign enterprises - pharmaceutical producers and wholesalers, WT/ACC/SPEC/RUS/31 
Page 8  
 
subject they have own affiliates on the territory of the Russian Federation, which 
have got:    - license for a relevant type of business activity pursuant to 128-FL; 
- import license pursuant to 86-FL. 
 
Therefore, foreign enterprises, which intend to import to the territory of the Russian Federation, shall:   - establish (register) an affiliate of the company on the territory of the 
Russian Federation; 
- register as a legal person on the territory of the Russian Federation; 
- get license for the relevant type of activity (pharmaceutical production 
or distribution) pursuant to provisions of 128-FL; 
- get license for pharmaceutical import to the territory of the Russian 
Federation according to the Import and Export Regulation.    
There are no statutory licensing requirements for pharmaceutical exports from the territory of the Russian Federation.  
 
Licensing of export-import of precious metals and precious stones. 
 
 
There are no statutory licensing and quoting requirements for imports of precious metals and precious stones to the territory of the Russian Federation.  Licensing of export of precious metals and precious stones from the territory of the Russian Federation.  
 
The licensing requirements for export of precious metals and precious stones depend on a commodity group. The licensing is mandatory for exports of:  - refined platinum and metals of platinum group in form of ingots, plates, 
powder and granules; 
- unprocessed precious metals (excluding natural pieces of metals not 
subject to refining ) 
- unprocessed gold and silver (only refined in form of ingots, plates, 
powder and granules as well as gold used to produce coins) 
- natural processed and unprocessed precious stones; 
- mineral matters (only unique amber pieces); 
- mineral and secondary raw materials containing precious metals, 
including concentrated ores and residuals of color metals and semi-products of color metal production, when it is possible to extract precious metals using industrial technologies. 
-  
No other types of licenses are required.  Import/export licensing related to natural gas and electricity
 
Under the Russian legislation there are no licensing requirements that govern 
access to pipelines or other distribution network so as to restrict the volume of 
gas and oil exported from the territory of the Russian Federation. There are no export/import licenses requirements for these products.  
Under the Federal Law No. 128-FZ of 8 August, 2001 “On Licensing of Specific 
Types of Activity” the following types of activity are subject to licensing:  WT/ACC/SPEC/RUS/31 
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- the operation of oil and gas production facilities; 
- the processing of oil, gas and oil/gas processing products thereof; 
- the transportation of oil, gas and oil/gas processing products; 
- the storage of oil, gas and oil/gas processing products; 
- the sale of oil, gas and oil/gas processing products; 
- the activity of operating gas networks. 
 The Ministry of Energy of the Russian Federation issues the activity licenses to legal entities and individual entrepreneurs. The activity licences shall be granted 
for a five-year term. The effective term of the licence may be extended on the 
licensee's application in accordance with the licence re-making procedure (the Decision of the Government of the Russian Federation No. 637 of August 28, 2002 “On Licensing Activities in the Field of Operation of Electric Grids and Thermal Grids, the Transportation, Storage Processing and Sale of Oil, Gas and 
the Products of Processing Thereof”). 
67 Russian Federation:  
 
There were no general restrictions to the right of persons and entities to import or export, except those connected with national security and public order interests.  The State monopoly in foreign trade was abolished by Presidential Decree No. 213 of 15 November 1991 "On Liberalisation of Foreign Economic 
Activity on the Territory of the Russian Soviet Federal Socialist Republic" (as 
amended on 27 October 1992) under which all enterprises were given the right to carry out foreign economic activities, whatever their form of ownership. 
68 Russian Federation:  
 
The operations of Russian and foreign participants of foreign trade activity involving importation to and exportation from the Russian Federation of 
precious metals and gemstones is governed by Decrees of the President of the 
Russian Federation of November 30, 2002, No. 1373 “On Approval of Regulation on Import to and Export from the Russian Federation of Natural and Cut Diamonds” and of June 21, 2001, No. 742 “On the Procedure of Import to and Export from the Russian Federation of Precious Metals and Gemstones”. Pursuant to the above, export of certain precious metals and gemstones requires 
a license issued by the Ministry of Economic Development of Russia. These 
include: platinum and platinum group metals, nuggets of precious metals not subject to refinery (within the quota allocated by the Government of the Russian Federation), refined gold and silver in bullion, plates, powder and granules, gemstones, precious metal coins, unique amber formations. 
 
Quoting and licensing extends also to export of raw material commodities containing precious metals (primarily copper, lead, zinc concentrates). Imports of precious metals and gemstones are not subject to quantitative restrictions or licensing. 
69 Russian Federation:  
 The activity licensing requirements in foreign trade on the territory of the 
Russian Federation were described in Federal Law No. 157-FZ of 13 October 1995 "On the State Regulation of the Foreign Trade Activity" (amended 8 July 1997, 10 February 1999).  Article 2 of this law stipulated that foreign trade activity could be carried out both by Russian as well as foreign participants in foreign trade activities.  Foreign participants in foreign trade activities were WT/ACC/SPEC/RUS/31 
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legal entities or natural persons recognized as such by the law of foreign states. 
If foreign companies or natural persons carried out foreign trade activity (exportation or importation) as foreign participants of foreign trade activity, they did not need to be registered or have any investments in the Russian Federation.  The Russian participants in foreign trade activities were Russian  
legal entities or natural persons who had obtained state registration as  legal 
entities or individual entrepreneurs in accordance with the Russian law.  WT/ACC/SPEC/RUS/31 
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70 Russian Federation:  
 
The registration of legal entities and natural persons as individual entrepreneurs was performed in accordance with Article 51 of the Civil Code and Presidential 
Decree No. 1482 of 8 July 1994 "On Streamlining of State Registration of 
Enterprises and Entrepreneurs in the Territory of the Russian Federation" and Federal Law No.129-FZ of 8 August 2001 "On State Registration of Juridical Persons". The registration of a legal entity required the submission of an application, the charter of the legal entity in question approved by its founders, 
a documentary confirmation of  deposition of no less than 50 per cent of the 
charter capital of the firm with the respective bank, and a certificate of payment of state duty in the amount of  2000 Rubles.  The registration of a natural person as an individual entrepreneur required an application from that person and a document confirming the payment of the registration charge in the amount of 
100 Rubles.  Denial of registration could be appealed through a judicial 
procedure. The registration act permitted the enterprise/individual entrepreneur to engage in economic activity, including foreign trade activity.  The above-mentioned principles contained in the Federal Law No.129-FZ of 8 August 2001 "On State Registration of Juridical Persons" entered into force on 1 July 2002 and regulated registration of the establishment, reorganization or 
liquidation, and introduction of amendments to instituting documents of legal 
entities as well as and the conduct of the State Registry of legal persons. The Federal Law No.129-FZ of 8 August 2001 "On State Registration of Legal Persons"  did not contain any restrictions or discrimination for foreign founders of legal persons.  The registration was effected solely by federal bodies.  The lists 
of documents necessary for the registration of a new legal en tity as well as of an 
entity under reorganization were stipulated in Article 5 of the Law on State Registration (application for registration, description of the organizational form, address, copies of instituting documents, and the charter capital) and were exhaustive.  Subjects of the Russian Federation had no rights to impose the requirements on legal or natural persons that might affect their rights to engage 
in importation or exportation of goods. 
In order to ensure tranparency in registration area under the provisions of 
Article 4 of the Federal Law No.129-FZ of 8 August 2001 "On State Registration of Legal Persons" the Ministry of Tax and Charges Collection of the Russian 
Federation should follow up the State Register containing information on 
establishment, reorganization and liquidation of legal entities and other respective information. This information should be published, placed on web-site of the Ministry of Tax and Charges Collection of the Russian Federation (www.nalog.ru) and renewed monthly at least. 
71 Russian Federation:  
 
Article 10 of the Law No. 157-FZ of 13 October 1995 "On the State Regulation 
of Foreign Trade Activity" (amendments of 8 July 1997, 10 February 1999) 
established that all Russian participants of foreign trade activities were permitted to undertake foreign trade activity, regardless of the form of their property and without any additional special permission or activity licence.  This rule had only three exceptions. 
72 Russian Federation:  
 
The first aimed at protecting human life and health and at proper collection of WT/ACC/SPEC/RUS/31 
Page 12  
 
internal taxes was the importation and exportation of alcoholic beverages. 
Pursuant to Federal Law No. 173-FZ of 22 November 1995 "On State Regulation of Production and Turnover of Ethyl Alcohol, Alcoholic and Alcohol-Containing Products" (as amended on 7 January 1999), natural persons and legal entities wishing to do business in these areas needed to obtain an 
activity licence in the agencies of the Ministry of Tax and Charges Collection 
after their state registration. The licenses were being issued for the purchase, storage and export of ethyl alcohol; purchase, storage and export of alcohol products; export of alcohol products; the import, storage and deliveries of ethyl alcoholic; import, storage and deliveries of alcohol products; import, storage 
and supplies of alcohol-containing products. Conditions and requirements to be 
fulfilled by the enterprises and entrepreneurs were stipulated in Articles 18 – 21 of the said Law. 
The license to export alcoholic and alcohol containing products as well as the licenses to import, store and deliver alcoholic and alcohol containing 
edible products will be issued to organizations to grant them the right to 
export and import all types of alcoholic and alcohol containing edible products. 
To import  alcohol products an organization shall obtain an activity license, i.e. a 
general or one-time license to import, store and deliver alcoholic products issued by the Ministry of Taxes and Fees of the Russian Federation; 
In the annual volume of alcoholic products turnover imported alcoholic 
products (except for wines, cognac items and beer) which are imported into the customs territory of the Russian Federation shall not make up more than 10 per cent of the overall annual volume of alcoholic products sold on the territory of the Russian Federation. In so doing the share of 
alcoholic products with not more than 15 per cent of ethyl alcohol 
content of the volume of the final product shall constitute at least 60 per cent of the overall annual volume of alcoholic products imported into the customs territory of the Russian Federation. 
To export  alcohol products an organization shall obtain an activity license, i.e. a 
general or one-time license to export, store and deliver alcoholic products issued 
by the Ministry of Taxes and Fees of the Russian Federation. The Law establishes two kinds of licences: general licences and one-time licences. The general licenses to import/export, store and deliver alcoholic products shall be issued only to organizations with the paid-up authorized capital of no less 
than 40 thousand federal statutory minimal wages and which have been 
performing deliveries of alcoholic products for at least one year (while having the turnover of imported alcoholic products of at least 50 thousand decalitres over one year in equivalent to absolute alcohol). The licences shall be issued for a term of up to three years and shall not restrict the volume of alcohol and alcohol 
-containing foodstuffs, intended for the import/export (Article 21 of the Federal 
Law No. 171-FZ “On the State Regulation of the Production and Trading Volume of Ethyl Alcohol and Alcoholic Drinks”). One-time licenses shall be issued for a term of up to five months to organizations to export and import, store and deliver alcoholic and alcohol containing edible 
products amounting to no more than 500 decalitres in equivalent to absolute 
alcohol with their customs value not exceeding 100 thousand federal statutory minimal wages (Article 21 of the Federal Law No. 171-FZ “On the State Regulation of the Production and Trading Volume of Ethyl Alcohol and Alcoholic Drinks”).  WT/ACC/SPEC/RUS/31 
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Licensing fees provided by Federal Law No. 5-FZ of 8 January 1998 "On 
Charges for Issuance of Licenses for Production and Turnover of Ethyl Alcohol, Alcohol Containing – Products" are shown in Table 7. WT/ACC/SPEC/RUS/31 
Page 14  
 
 
73 Russian Federation:
 
 
The second exception also aimed at protecting human life and health related to imports and exports of pharmaceutical products (medicines). According to 
Federal Law 86-FZ of 22 June 1998 "On Medicines", the right to exports and 
imports of pharmaceuticals was enjoyed by Russian participants of foreign economic activities, who had a licence for the production or wholesale trade of  these goods.  Pursuant to Federal Law No. 128-FZ of 8 August 2001 "On Licensing of Certain Types of Activity", the licensing requirement in respect of 
pharmaceutical activity and production of medicines was due to the overall 
requirement of license availability in all types of activity that might cause damage to rights, lawful interests and health of Russian nationals and where regulation was only possible in the form of licensing.  Once a company obtained such an activity licence in all two cases mentioned above, it would be eligible for 
the receipt of import and export licenses each time it wished to import or export 
goods subject to licensing. In accordance with Article 15 of Federal Law No. 128-FZ of 8 August 2001 "On Licensing of Certain Activities", a fee of 1,300 Rubles (about US$40) was charged for the issuing of each license. Regarding importation of pharmaceuticals, foreign-owned firms enjoyed the same rights as Russian firms in the Russian Federation and could obtain an activity licence 
under the same scheme. Foreign-owned firms which were not established in the 
Russian Federation should have their own representative office
2 in the Russian 
Federation.  If this was the case, these firms could also apply for an import license. The limitation of the number of companies importing and exporting certain products could be done by virtue of federal law only. In absence of such 
a law no authority had the right to take such measures. Under Article 21 of 
Federal Law No. 86-FZ of 22 June 1998 "On Medicines" sole domestic and foreign practitioners were not permitted to export pharmaceuticals to the Russian Federation. In accordance with the same law, imports of medicines into Russian Federation were only allowed to enterprises that produced medicines; wholesale traders of medicines; academic research organizations; institutions, 
laboratories for development, study and control of quality, effectiveness and 
safety of medicines, subject to permission of the federal medicine control agency for import of the relevant consignment of medicines; foreign enterprises producing medicines and foreign wholesale traders of medicines provided they had representative offices in Russia. All applicants for a licence to import 
medicines had to undergo an uniform procedure as provided under Government 
Resolution No. 1539 of 25 December 1998 "On Import into and Export from the Russian Federation of Medicines and Pharmaceutical Substances". 
74 Russian Federation:  
 
The third exception concerned the exportation (there were no such requirements for importation) of precious stones and precious metals.  The exportation of 
unprocessed precious metals was prohibited in the Russian Federation.  The 
exportation of affinated platinum was effected under quota restrictions and the exportation of affinated gold, silver and natural precious stones was effected under non-automatic licensing.  To obtain an export license for precious metals and precious stones under Presidential Decree No. 742 of 21 June 2001, "On the Procedure of Importation into and Exportation from the Russian Federation of 
                                                      
2 In accordance with Article 33 of the Civil Code of the Russian Fede ration the representative office is 
a detached division of legal entity, located elsewhere than  its business address, which represents and protects the 
interests of such legal entity.   WT/ACC/SPEC/RUS/31 
 Page 15 
 
 
Precious Metals and Precious Stones".  The following authorizations were 
required:  (i) CBR and crediting institutions having the CBR licence to perform operations with precious metals under the Federal Law No. 395-1 of the Russian Federation of 2 December 1995 "On Banks and Banking", extracting organizations having the licence under the Federal Law No. 2395-1 of the 
Russian Federation of 21 February 1992 "On Underground Resources" as well 
as the producers and individual entrepreneurs having the confirmed property rights to a certain metal had the right to export of refined gold and silver;  (ii) for export of precious stones and precious metals – registration certificate of the Purity Supervision Committee (issued based on Federal Law No. 41-FZ of 
23 March 1998 "On Precious Metals and Precious Stones");  (iii) for export of 
ores of non-ferrous metals containing precious metals – opinion of the Ministry of Finance and the Ministry of Industry and Science regarding the practicability and feasibility of commercial recovery of precious metals (Presidential Decree No. 742 of 21 June 2001, "On the Procedure of Importation into and 
Exportation from the Russian Federation of Precious Metals and Precious 
Stones"). Exports of certain precious metals and precious stones are performed under licenses issued by the Ministry of Economic Development of Russia – platinum and platinum group metals, nuggets of precious metals not subject to refinery (within the quota allocated by the Government of the Russian Federation), 
refined gold and silver in bullion, plates, powder and granules, gemstones, 
precious metals coins, unique amber formations. The authorized exporters are:  a) the Central Bank of the Russian Federation; 
b) lending institutions licensed by the Central Bank of the Russian Federation to 
perform transactions in precious metals (in respect of the said precious metals held by them or sold by them on the foreign market under commission agreements with the owners of such precious metals); c) mining companies (in respect of the said precious metals held by them by 
reason of their mining operations); 
d) producers of precious metals (in respect of the said precious metals held by them by reason of their production operations); e) other organizations and individual entrepreneurs that are Russian participants of foreign trade as defined by the legislation of the Russian Federation on regulation of foreign trade activity (hereinafter referred to as 
“Russian participants of foreign trade”). 
 Quoting and licensing extends also to export of raw material commodities containing precious metals (primarily copper, lead, zinc concentrates). As a mandatory condition of export of raw material commodities containing 
precious metals: 
 
a) consignments of raw material commodities intended for export must be 
accompanied with certificates of chemical composition issued by analytical laboratories approved for adequacy of equipment and lack of 
bias by the State Committee of the Russian Federation for 
Standardization and Metrology. The procedure for such approval (attestation) of analytical laboratories and the procedure for issuance of the above certificates are in the discretion of the State Committee of the Russian Federation for Standardization and Metrology; 
b) availability of opinions of the Ministry of Finance of the Russian WT/ACC/SPEC/RUS/31 
Page 16  
 
Federation and the Ministry of Industry, Science and Technology of the 
Russian Federation as to the possibility and economic effectiveness of commercial recovery of precious metals from raw material commodities in the Russian Federation. 
 
Export of uncut natural diamonds is subject to quoting where such export is 
performed by the mining companies (except diamonds unfit for use in jewelry and –3+2 classes, ‘bort’ and ‘drilling’ types), or from state depositaries of precious metals and gemstones of the Russian Federation Regions (Yakutia, Magadan Region). 
 Import of precious metals and gemstones is free from any quantitative 
restrictions and licensing. All documentation and procedures required for an export or import transaction in precious metals and gemstones are completed at the dedicated customs checkpoints. 
77 Russian Federation:  
 
In order to improve the system of import licensing in the Russian Federation, 
the State Duma of the Federal Assembly of the Russian Federation had passed in 
the first reading and was currently preparing for the second reading a draft federal law "On Amending the Federal Law On Charges for Issuance of Licenses and Right for Production and Marketing of Ethyl Alcohol, Alcohol Containing and Other Alcoholic Products". This draft law was designed to 
provide a unified rate of the licensing charge (500 minimum wages) for the right 
of production, storage and sale of alcoholic products, the right to export ethyl alcohol and alcoholic products and the right to purchase ethyl alcohol, alcohol-containing and alcoholic products for import, storage and wholesale. 
81-84 Import Regulations 
- Customs Regulations and Customs Tarriff 
81-84 The revised text is a step in the right direction, but Russia should respond to the 
longstanding information requests of WP members, as follows:  
- Please provide a copy of the draft Customs Code prior to its enactment. 
- Please provide a copy of Chapter 25.1 of Part II of the Tax Code prior to 
its enactment. 
- Please confirm in the text that Customs Order No. 25 of January 25, 
2001 has been repealed. 
- Has Russia provided a copy of its HS 2002 applied tariff schedule, as 
noted in para 86? 
84 Text should be updated to reflect the fact that both the draft Customs Code and 
Chapter 25.1 are in their second readings before the Duma and are available for WP review, and a description should be provided of their provisions as they relate to WTO Agreements, e.g., a listing of the WTO Agreements and other obligations whose provisions were implemented in the text of the new Code. 
81 Russian Federation:  
 
The existing Law “On Customs Tariff” and the draft chapter “Customs Duty 
and Customs Charges” of Part II of the Tax Code of the Russian Federation 
address issues of customs tariff regulation of import and export of goods, and determination of the basis for calculation of customs duties and other customs payments (customs value of goods) consistently with the rules and disciplines of GATT (WTO). As for customs administration and customs procedures, these 
are governed by the  Customs Code of the Russian Federation. We therefore 
maintain that customs administration does not fall within the scope of Law “On  WT/ACC/SPEC/RUS/31 
 Page 17 
 
 
Customs Tariff” or the draft chapter “Customs Duties and Customs Charges”, 
as is suggested by para. 81. 
84 Russian Federation:  
 
In October 2002, the Government of the Russian Federation presented to the State Duma of the Federal Assembly of the Russian Federation a draft chapter 
25.1 “Customs Duties and Customs Charges” to be incorporated into Part II of 
the Tax Code of the Russian Federation. This draft chapter provides methods of determination of the basis for calculation of customs duties and other customs payments (customs value) in accordance with the provisions of Article VII GATT and the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994 (the Agreement on the rules of customs 
valuation). 
 Thus, the language “Draft Article 27 of the new Customs Code contains provisions on customs valuation procedures” as well as all other references to “Article 27 of the draft Customs Code of the Russian Federation” determining 
the methods of customs valuation should be deleted from para. 84.  
 The language “In anticipation of further requests from members, the representative of the Russian Federation stated that the interpretative notes annexed to the Customs Valuation Agreement not included in draft Chapter 27 
of the Tax Code would be reflected in another regulatory act” should be deleted 
for the same reason as above and considering that the draft Chapter 25.1 “Customs Duty and Customs Charges” of Part II of the Tax Code of the Russian Federation presented by the Government of the Russian Federation to the State Duma of the Federal Assembly of the Russian Federation and approved by the Ministry of Economic Development of Russia does not contain any applicable 
provisions but provides merely that the federal executive authority for customs 
is entitled to issue, with consent of the Ministry of Economic Development and Trade of the Russian Federation, guidelines on customs valuation of goods imported to the customs territory of the Russian Federation provided that such guidelines do not contravene the provisions of this Code. 
 
To better and more accurately reflect the draft Chapter 25.1 “Customs Duty and Customs Charges” presented by the Government of the Russian Federation to the State Duma, the language “The draft envisaged that the primary basis for customs value was the transaction value” should be replaced with “The draft 
envisaged that the primary method of customs valuation was the method of 
transaction value”. 
85-90 - Ordinary Customs Duties 
89 Please list any trading partners that are WTO Members that do not receive 
MFN treatment.  Indicate where the most recent list of GSP recipients can be 
found, e.g., the most recent legal citation. 
90 Russia should include a substantive response in this Section to the question on 
application of double-tariffs to WTO members. 
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 negot iations 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 fu rther amendments can be expected in WT/ACC/SPEC/RUS/31 
Page 18  
 
Russia’s Law on Customs Tariff and wheth er 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 re port 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.  WT/ACC/SPEC/RUS/31 
 Page 19 
 
 
89 Russian Federation:  
 
The following WTO members do not enjoy MFN treatment: 
 
Antigua and Barbuda, Bahrain, Barbados, Belize, Brunei Darussalam, Central 
African Republic, Côte d’Ivoire, Democratic Republic of the Congo, Dominica, 
Dominican Republic, Estonia, Fiji, Guatemala, Haiti, Hong Kong (China), Lesotho, Macao (China), Malawi, Maldives, Namibia, Niger, Papua New Guinea, Paraguay, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Senegal, Separate Customs Territory of Penghu, Kinmen, and Matsu (Taiwan 
enjoys MFN treatment), Solomon Islands, Suriname, Swaziland, Togo, Trinidad 
and Tobago, United Arab Emirates.  As it was stated in para 89 of the document WT/ACC/SPEC/RUS/25/Rev.1 the WTO members could have the lists of Russia`s MFN partners and GSP 
recipients (to be distributed as a non-paper by the WTO Secretariat). 
91-96 - Tariff Quotas 
91-96 In light of developments in January 2003, this section will require extensive 
attention. 
 
- Based on information provided to the WP during informal session, 
Russia should update this Section to lay out the scope, purpose, legal authority, and administration of TRQs applied to imports, both for trade remedy and trade liberalizing purposes.  
- The text should reflect the views of Members on Russia’s establishment 
of TRQs, in particular their opposition to the imposition of TRQs to limit imports into Russia in areas currently subject to tariff-only regulation, and that they do not consider this issue to be resolved.  
- The statement of Members rejecting Russia’s contention that license or 
quota auctioning is WTO consistent or a fee for services should be 
expanded to include reference to the fact that any fees charged or 
revenues collected in this regard must not exceed the bound rate of duty established.  
- The text should also reflect Members’ requests for a commitment
 from 
Russia that in the event that Russia ever makes use of TRQs, they would 
be administered consistent with WTO requirements, including allocation 
on a non-discriminatory basis among all import suppliers, and that any fees charged or revenues collected in their administration would not exceed the bound rate of duty established in Russia’s Schedule of Concessions on Goods Market Access. 
91-96 We urge Russia to address the substance of the questions raised by Members in 
relation to this section of the Report. In view of recent developments in this area which we view with deep concern, 
the important issue of tariff quotas will need Russia's full explanation and 
reconsideration at the meeting of the Working Party to be held in March 2003. 
91-96 List the items where tariff quotas are used and will be used. 
91-96 We are strongly opposed to Russia’s pr oposals to introduce new tariff quotas to 
restrict market access. Whether and how tariff quotas might be applied 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 
settlement. 
94-95 Has Russia joined the Rome Convention for the Protection of Performers, WT/ACC/SPEC/RUS/31 
Page 20  
 
Producers of Phonograms and Broadcasting Organizations? If not, when it 
intends to do so? If acceded to the Convention, will Russia make reservations concerning the Article 12, if yes – which reservation particularly? What kind of other reservations Russia intends to make, if any? 
95 We seek the addition of the following text  to the first sentence of this paragraph: 
“by enacting amendments to the Tax Code to ensure MFN access to its TRQs” 
96 The fundamental issue raised at paragraph 96 relates to the qualifications that 
enterprises need to have in  order to receive tariff quota allocations under whatever 
system is used by Russia to allocate ta riff 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 c onformity 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 t hat 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 Re port that clarifies the qualifications that 
enterprises need to have in ord er to receive tariff quota allocations. 
95 Russian Federation:  
 
The draft Chapter 25.1 “Customs Duties and Customs Charges” of Part II of the 
Tax Code of the Russian Federation provides the general principles of operation 
of tariff quota. The determination of the procedure for distribution of tariff 
quota is left in the discretion of the Government of the Russian Federation.  Thus, we propose deleting the last sentence of para. 95 should be deleted. 
97 - Tariff Exemptions 
97 This text should be expanded to include reference to tariff exemptions granted 
currently or in the recent past for investment purposes (automobiles and PSA projects) or to promote domestic industry (aircraft).  The text should be updated to include reference to any such authority in the draft Customs Code. 
97 Russian Federation:  
 In the first sentence after the words “in accordance with the provisions of 
Federal Law No. 5003-1 of 21 May 1993 "On Customs Tariff” add “and cannot be ad hoc ”, which will make it consistent with the provisions of Article 35 of the 
Law “On Customs Tariff” and will reflect the general principle of granting tax and customs preferences in the Russian Federation compatible with the GATT 
rules and disciplines. 
 “Printed or recorded materials related to culture, science, education” should be removed from the list of goods eligible for customs preferences in para. 97 as the applicable section (l) of Article 35 of the Law “On Customs Tariff” which 
provided the above preferences is currently ineffective (Federal Law of 
November 25, 1995, No. 185-FZ, Article 3).  Article 34 of the Law “On Customs Tariff” provides the general principles of provision of tariff benefits stipulated in Articles 35, 36 and 37 of the Law. Thus it would be reasonable to remove the reference to Article 34 in the penultimate 
sentence of para. 97. 
 The words "Commitments under International Agreements” should likewise be removed from the above sentence.   WT/ACC/SPEC/RUS/31 
 Page 21 
 
 
 
 
Tariff Quotas  
 
I. White sugar (from the 20th of July 2002) originated from developing 
countries – GSP recipients  
 
 Legal Reason:  
  Resolution of the Government of the Russian Federation dated  
15 of July 2002 N 536 
 II.  Beef (from the 1
st of April 2003) 
  Legal Reason:
 
 
 Resolution of the Government of the Russian Federation dated  
23 of January 2003 N 49 
 III. Pork (from the 1
st of April 2003) 
 
 Legal Reason:  
  Resolution of the Government of the Russian Federation dated  
23 of January 2003 N 50 
 
The Ministry of Economic Development and Trade of the Russian Federation is 
an authorised body.  For the 1
st group of goods tariff quotas are auctioned at a stock exchange. The 
Ministry issues licences. 
 
For the 2nd  and 3rd group of goods tariff quota for 90% of volume tariff quotas 
are divided using the same method as for the 2nd group of goods and for the last 
10% are auctioned at a stock exchange. The Ministry issues licences. 
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 Mi nistry of Transportation and the Fisheries 
Committee. It should be made clearer that the commitment 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 coll ected on the basis of non-discrimination 
principle. Does this mean that port charges 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 where it is indicated that Russia would like to apply exemption from the MFN treatmen t as regards to the payment of port 
charges. WT/ACC/SPEC/RUS/31 
Page 22  
 
108-110 Russian Federation:
 
 
Port fees  
 The representative of the Russian Federation confirmed that port-charges are 
collected in the commercial seaports of the Russian Federation, irrespective of 
their organization, legal status and ownership, from Russian and foreign vessels and floating facilities on the basis of non-discrimination principle.  He then stated that the port fees used in commercial seaports (Tables 13(a) and 
13(b)) of the Russian Federation had been approved by the Ministry of 
Transport on 21 July 1995. The port fees used in fishery seaports had been approved by the Fisheries Committee on 12 October 1995.  GATS Article II (MFN) exemptions of the Russian Federation is currently a 
matter of bilateral negotiations. 
111-116 Application of Internal Taxes on Imports 
- Excise Taxes 
115 Russian Federation:  
 
Pursuant to Chapter 22 “Excise Taxes” of the Tax Code of the Russian Federation (hereinafter the “Code”), effective July 1, 2001, the country of destination principle is applied to excisable goods carried across the customs borders of the Russian Federation from CIS states except the Republic of 
Belarus, i.e. excisable goods imported to the territory of the Russian Federation 
from the CIS states are subject to excise taxes. No offset of excise taxes paid on the territory of such states, except in the Republic of Belarus, is done. Any sale of excisable goods outside of the Russian Federation, except in the Republic of Belarus, is tax-free.  
Thus, effective July 1, 2001, a uniform taxation procedure applies to carriage of 
excisable goods across Russia’s customs border with other countries, except the Republic of Belarus, thus there is no differentiated excise treatment of imports of excisable goods from CIS countries as compared with imports of such goods from other countries. 
 
Excise taxes are charged on sale of excisable Russian goods in the Republic of Belarus and imports of excisable goods from the Republic of Belarus to the Russian Federation based on the country of origin principle, by virtue of Article 27 of the Agreement between the Russian Federation and the Republic of 
Belarus of December 8, 1999 “On the Creation of a Union State”. The said 
Article provides that the Union State maintains a uniform principle in respect of levying indirect taxes irrespective of the actual location of the taxpayer within its territory. In this regard and pursuant to Article 13 of Federal Law No. 118-FZ of August 5, 2002 “On Enacting Part II of the Tax Code of the Russian Federation and Amending Certain Tax Acts of the Russian Federation”, the 
amount of excise tax payable on excisable goods originating in and imported 
from the Republic of Belarus is reduced by the amount of excise tax paid in the country of origin.  As for inclusion of the customs duty in the taxable base for the purposes of the 
value-added tax and excise taxes levied on imports of goods to the customs 
territory of the Russian Federation, this requirement of the Russian legislation is  WT/ACC/SPEC/RUS/31 
 Page 23 
 
 
consistent with the practice of implementation of the GATT.  WT/ACC/SPEC/RUS/31 
Page 24  
 
 
117-125 - Value Added Tax 
117-125 Russian Federation:  
 
The Russian Federation and the Republic of Belarus are the parties of the bilateral Treaty  of 8 December 1999 leading, inter alia , to the formation of a 
unique economic space based on the  legislation to be unified. Both states are 
negotiating the issues of taxation within this unique economic space. In this regard a draft agreement on the procedures of compensation of losses of the budgets applying indirect taxes in bilateral trade on the basis of country of origin has been placed for consideration. 
126-129 Quantitative Import Restrictions, including Prohibitions and Quotas 
126-129 We note the statement in paragraph 186 that SCC Order No 1002 of 19/10/01 
(limiting number of customs posts for timber exports) is no longer applied.  Russia indicates that the Order was cancelled by means of a teletype message 
issued by the SCC.  Can Russia explain how a teletype message provides a 
satisfactory legal basis for this (including in the light of the footnote to paragraph 56, in which Russia states that such communications are purely recommendatory)?  Also, how have relevant WTO/GATT transparency and publication requirements been met in this particular example? 
 As regards restrictions applied on alcohol, alcoholic drinks and alcohol-
containing products, we would welcome further information on the proposed legislative and regulatory amendments.  The reference in paragraph 129 to the 
intention to amend Law 171 of November 1995 and to eliminate any import and 
export licensing is welcome.  Russia should provide firmer information on the details of this legislative amendment and on the timetable for its enactment and implementation.  
In relation to Import Licensing, we remain concerned at the wide coverage and 
do not consider that a convincing case for cover under GATT Article XX can be made in every case.  We also invite Russia to clarify the situation concerning licensing requirements for telecommunications equipment and cryptographic products. 
129 The text should be updated to include information concerning the elimination of 
the ban on imports of alcohol, e.g., the title and status of the legislation that 
eliminated the ban, and the disposition of any other non-tariff restrictions or 
requirements on the importation of alcoholic beverages, other than tariffs, excise taxes, and activity and import licensing. 
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 draft law referred to in Para 77? 
126-129 Russian Federation:  
 Even after the draft law “On Making Amendments and Supplements to the 
Federal Law   “On State Regulation of Production and Turnover of Ethyl Alcohol, Alcoholic and Alcohol-Containing Products”, currently in the State Duma (still preparing for a second reading), is passed, it will not repeal Federal Law 171-FZ. What the above draft law essentially does, is make a number of amendments to the existing law, including elimination of import quota and 
introduction of automatic import licensing, which are intended to achieve WTO 
compliance. 
130-141 Import Licensing Systems  WT/ACC/SPEC/RUS/31 
 Page 25 
 
 
130-141 
Tables 16(a) and (b) In §132 Members expressed many concerns and questions about licensing 
requirements for pharmaceutical products, i.e. the periodic re-registration requirement that is not automatic.  In connection with §72, it seems that in order to import pharmaceutical 
products in Russia, the applicant must get an activity license, a preliminary 
import permit (from the ministry of Health (§134) and an import license (§137). Please explain the rationale of such a preliminary permit and how is it consistent with the Import licensing Agreement  (article 1.6: Application procedures shall be as simple as possible). 
 
Paragraph 136 indicates that Members expected the Russian Federation to make a commitment that any import licences on ethyl alcoholic beverages and pharmaceutical products should be granted automatically on the basis of a regime compatible with WTO requirements including art.2 LIC. We urge the 
Russian delegation to take such a commitment.  
 In § 134 the 0.05% fee on the contract value of goods is not compliant with article VIII GATT because it does not correspond to the cost of service rendered. In § 140 the Russian delegation indicated that legislative and regulatory framework to modify procedures on imports of pharmaceutical 
products was currently ongoing. Please indicate what are the modifications 
foreseen and if they will repeal also the 0.05% fee of the contract value of goods for issuance of a preliminary permit or transform this fee into a fee consistent with Article VIII GATT.  
Please indicate what have been undertaken to amend or repeal Law No 86 
concerning pharmaceuticals mentioned in paragraph 139. Has the new draft Foreign trade and Import Export Licensing Law been adopted yet ? What will be the main changes introduced by this law ?  
We also associate with the comments contained in SPEC/RUS/30 page 7 
regarding § 134-140. 
130-141 This section should be reorganized to consolidate information for each type of 
licensing addressed and to respond in a coordinated fashion to the concerns raised by WP Members. 
130-131 Text will need to be updated in light of provisions of the draft Law on State 
Regulation of Foreign Trade, which revises the authority to use import and export licensing to regulate trade, and a description should be provided of its provisions as they relate to the WTO Agreements, e.g., Article XI and XIII of the GATT and the Agreement on Import Licensing Procedures.  
 
Please clarify if the reference in this section to human, animal, and plant health includes SPS requirements, or only to the specific products listed in Table 16(a). 
132-133 Text should reflect views of WP Members that in some cases, licenses may not be 
necessary within the meaning of GATT Article XX, and that in combination with activity licensing and Russia’s offer on distribution services, Russia’s import regime for pharmaceuticals and alcoholic beverages poses non-tariff 
hurdles to importation and distribution of that should be streamlined and 
simplified in line with WTO provisions and that Russian’s offer on distribution services required improvement. 
133-134 Please clarify whether a Representative Office is sufficient to import 
pharmaceuticals for commercial purposes, as it has been clearly stated WT/ACC/SPEC/RUS/31 
Page 26  
 
elsewhere that a Representative Office can not engage in business activities, but 
only promote trade, e.g., through participation in a trade show.    The text should be reorganized and expanded to describe, step by step, the requirements for importing pharmaceuticals, including commercial registration, 
activity licensing, registration by the Ministry of Health and mandatory 
certification by  Gosstandart, and non-automatic import licensing (which involves both the Ministry of Health and MEDT).   - In addition, please explain why an both an activity license and non-
automatic import licenses are necessary when the activity license 
requirement already exists to screen importers?  Russia has not notified Members that pharmaceuticals are subject to quantitative restrictions.  What is the aspect of import regulation  that cannot be addressed with automatic import licensing? 
- Please clarify what is meant by a “preliminary permits” for imports of 
pharmaceutical products referred to in paragraph 134.  Are these import licenses or some other form of import permit?  When is a preliminary permit as opposed to an “import license” required?  What is the procedure for application?  What is the duration of the preliminary permit?  How does this permit fit in with the procedures outlines for how 
to obtain activity and import licenses?   
- Please clarify how the ad valorem fee for this permit can be consistent 
with GATT Article VIII, when it the  based on a percentage of the contract value, rather than on the cost of the services provided and what steps Russia will take to bring it into conformity with WTO 
requirements. 
 Concerning the introduction in December 2002 of obligatory conformity certification of medicines (pharmaceuticals), separate from the requirements of the 1998 Law on Medicines: 
 
- Please describe in the text how this certification procedure functions; 
how it differs from the previous process of registration of medicines by the Ministry of Health; whether the conformity certification is intended to replace the previous procedure or supplement it; and whether these 
procedures apply equally to imported and domestically-produced 
medicines?   
- What is the relationship between prior authorizations required for 
importation of goods subject to Hygienic Assessment and Mandatory Certification and the import licensing requirements laid out in Table 16(a).  How are such requirements applied to domestic output? 
Table 16(a) Please address concerns that the list of products subject to non-automatic 
import licensing, e.g., product group 8471 listed under Information Protection 
Devices, contains approximately 23 HS lines and is too broadly drawn, as not all of these products are used solely for the purposes of encryption.  Can HS lines be identified within the 8471 category to specify which products require a non-automatic import license?  
- Can some indication be given of the representative HS codes for “Special 
Devices for Unauthorized Obtaining of Information?” 
134-138 We have serious concerns on practices applied by line ministries or other 
institutions charging extra fees for importation permits based on the contract  WT/ACC/SPEC/RUS/31 
 Page 27 
 
 
value of the goods.  
We would like to see a clear commitment in the Accession Report on elimination of non-WTO consistent measures until the date of accession. 
Table 16(a) List of goods subject to non-automatic import licensing are in Table 16(a). The table 
gives more clarity for some products, and 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 unaut horised 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 prov ided 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 under GATT  Article XX (paragrap h 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 contro ls 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 imposed by Russia (e.g., fees and charges, 
SPS measures and other technical regul ations and conformity assessment 
procedures, licensing and approval re quirements and procedures) will be 
applied equally and uniformly to Russ ian legal and natural persons and 
Russian products as they are to forei gn legal and natural persons and foreign 
products. 
- We ask Russia to provide positive confirmation of national treatment being 
accorded to foreign legal and natural persons 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 subject 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 relation to concerns about the double 
requirements for importing alcoholic beverages.  Furthermore, we note that the same concern applies to importation  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 sp ecifically 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 obta in an import licence is registration 
in Russia, but that if it is not registered 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 WT/ACC/SPEC/RUS/31 
Page 28  
 
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 that the legislative and regulatory 
framework to modify procedures for imports of pharmaceutical substances and 
medicines is currently ongoing. Would th ese 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 charged inconsistently  with Article VIII 
of the GATT 1994?  WT/ACC/SPEC/RUS/31 
 Page 29 
 
 
164-165 - Pre-shipment Inspection 
164-165 This section should be updated to indicate any new developments in Russia's 
use, or not, of pre-shipment inspection facilities. 
164-165 We have no substantive problems with the text in paragraphs 164-165.  However: 
- We would like Russia to comment on why it considers it might be necessary 
to implement preshipment inspection. 
164-165 Russian Federation:  
 
In order to verify the quality, the quantity, the price, including currency exchange rate and financial terms, as well as the customs classification of goods 
to be imported to the territory of the Russian Federation the Government of the 
Russian Federation is considering a draft Resolution to introduce the procedures on preshipment inspection.  The WTO Agreement on Preshipment inspection provides for the opportunity to 
contract for or mandate the use of preshipment inspection activities without 
limitation of time of such use. The Government of the Russian Federation intends to use preshipment inspection activities for some time to estimate weather the use of preshipment inspection activities is worthwhile or not. 
166-175 - Trade Remedy Measures 
169 & 174 Paragraph 169 addresses the need for Federal Law 63-FZ to be replaced by 
WTO-conform legislation.  There is no reason for the views of WTO Members on this to be presented in brackets.  A consequent commitment by Russia should also be included. 
 
Similarly, paragraph 174 should not be in brackets as it describes the views expressed by WTO Members.  Commitments language as outlined here should however be included in future drafts of the Working Party report. 
166-175 The Section title should include separate reference to the three different types of 
trade remedy (Anti-dumping, Countervailing Duty and Safeguard Regimes).  Additional Inputs:
 
 
In January, Russia concluded a safeguard investigation on imports of poultry meat, and determined that it would apply measures in the form of quotas to restrict imports.  We are reviewing the report of that investigation and reserve the right to provide additional comments on this issue for the draft Working 
Party report text at a future time. 
 The WP report text should be updated to reflect the imminent passage of new legislation that intends to bring Russia’s trade remedy regime into conformity with WTO Agreements, noting improvements in the new legislation that correct 
deficiencies in current legislation, and responding to the concerns raised in the 
earlier draft, e.g.: - By what date does Russia foresee enactment of the new legislation and 
implementation of new procedures in investigations? 
- Please provide a list of all current antidumping, countervailing duty, and 
safeguard actions in place against imports, listing both products covered 
and countries affected, to illustrate how the current legislation has been 
used. 
- What is the functional difference in procedure or penalty application 
under the current Russian “trade remedies” regime between antidumping remedies and safeguards?  WT/ACC/SPEC/RUS/31 
Page 30  
 
168 This section, concerning the application of import quotas for balance of 
payments purposes, does not indicate that Russia intends to administer this and subsequent such authority in conformity with Article XII of the GATT and the Understanding on Balance of Payments Measures, nor to give preference to price based measures.  Reference to these WTO obligations should be included 
in the text. 
166-175 Information based on new legislation expected. 
166-167 Import Surcharge : 
We note paragraphs on Russia’s import surchar ge (paras 122-123 of the first draft 
report) have been transferred to another par t 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 paragr aph 171, particularly in relation to 
safeguards.  Furthermore, we  seek clarification of the meaning of the passage within 
Federal Law No.63-FZ that investigations  “should be primarily devoted” to 
determination of injury, caus ation aspects and dumped imports. 
We ask that the substance of these concerns be addressed. 
173 We seek an update on the passage of legislation referred to in paragraph 173. 
166-175 Russian Federation:  
 In order to make this sub-heading clear for the WTO Members the Russian 
Federation proposes to define each part of this sub-section.  In particular:  - Import surcharge
 
- Antidumping  
- Countervailing Measures  
- Safeguards  
 Import surcharge
 
 
The representative of the Russian Federation noted that Article 15 of Federal Law No. 63-FZ of 14 April 1998 "On Measures to Protect the Economic Interests of the Russian Federation with Respect to Foreign Trade in Goods" provided the legal framework to safeguard the country's balance of payment. In 
particular this Article contained: 
 1. For the purposes of maintaining the equilibrium of the balance of 
payments of the Russian Federation the Government of the Russian Federation may adopt a decision to impose a temporary limitation on the imports of goods. 
2.  The limitation of the imports of goods shall be implemented by means of 
introducing an import quota or other measures for a term required to restore the equilibrium of the balance of payments of the Russian Federation with due regard to the international obligations of the Russian Federation.  WT/ACC/SPEC/RUS/31 
 Page 31 
 
 
3. The monitoring of the implementation of such a quota or other goods 
imports restriction measures shall be the responsibility of the federal body of executive power specified in Article 3 of the present Federal Law. 
4.  Decision on the imposition of limits on the imports of goods in the case 
specified under Item 1 of the present Article shall be made on the 
proposal of the Central Bank of the Russian Federation or of federal bodies of executive power as approved by the Central Bank of the Russian Federation. 
5. The measures listed in the present Article shall be applicable on a non-
discriminatory basis. 
 
Therefore Russian Federation believes that there is no inconsistencies of the provisions of Federal Law No. 63-FZ with WTO requirements, i.e. Article XII of GATT 1994 and the UR Understanding on that article. 
A temporary 3% surcharge introduced by Resolution of the Government of the 
Russian Federation No. 791 of July 17, 1998, was in effect until February 28, 1999, and is not maintained at present.  
Antidumping
, Countervailing Measures , Safeguards  
 
The representative of the Russian Federation also noticed that a new draft Federal Law "On Safeguard, Anti-Dumping and Countervailing Measures" had been prepared by the Government with the objective of introducing full conformity with the relevant WTO provisions in these areas.  This new law had been submitted to the State Duma. The draft Federal Law makes more precise 
the terminology in these areas in compliance with the rules and provisions of 
WTO. Thus the draft provides a clearly distinction between the serious and material injury.  Also a new Law expands government’s authority on a phase of initiation of investigation. The draft provides the understanding of a specific subsidy in full conformity of WTO provisions. The definition of the dumping 
margin best of all correspond to Article II of the Agreement on implementation 
of Article VI of the General agreement on tariffs and trade 1994. A new Law keeps in force five-year maximum duration for antidumping and countervailing measures and eight-year for safeguards  
The new law should be applied to a legal relationship raised after it coming into 
force. It means that the investigation started before coming into force a new Law should be conducted under according 63-FZ 
List of all current antidumping, countervailing and safeguards duties and 
conducted investigations 
 WT/ACC/SPEC/RUS/31 
Page 32  
 
1.  Safeguards measures
 
 
Name of goods Phase rate 
Corn starch  
(Custom Tariff Code 1108 
12 000 0) 
Potato starch (Custom Tariff Code –1108 13 000 0), 
with the exception of 
members EEU Safeguards duty 30 % nor less  0,11 euro/1 
kg; 
10 % nor less  0,04 euro/1 
kg 
Caramel (Custom Tariff Code – 1704 
90 710 0,1704 90 750 0), 
with the exception of Byelorussia Safeguards duty  
 21 % nor less  0,18 euro/1 
kg 
Compressors 
(Custom Tariff Code – 8414 
30 910 1, 8414 30 910 2), with the exception of 
members EEU Safeguards duty  
 20 % 
Poultry meat  
(Custom Tariff Code – 
0207) Import quota 1050000000 kg 
Crystalline silicon 
(Custom Tariff Code – 2804 
69 0000) The investigation finished. Decision pending. 
Ball bearings and roller 
bearings  
(Custom Tariff Code – 8482 
10 9000, 8482 20 0000) The investigation finished. Decision pending. 
Sugar syrup  
(Custom Tariff Code – 1702 
90 990 0), With the exception of 
Byelorussia The investigation is conducted 
Confectionery with cocoa  
(Custom Tariff Code – 1806 90 5001, 1806 90 5002, 
1806 90 5009) The investigation is conducted 
Wall-paper  
(Custom Tariff Code – 4814) The investigation is conducted 
Fluor-spar  
(Custom Tariff Code – 2529 
21 000 0) The investigation is conducted 
 
 2. Countervailing  measures  
 
Metal bars  
 (Custom Tariff Code –7213 10 000; 7213 91 
100; 7213 91 410;  7213 91 490; 7213 91 
700; 7214 20 000; 7214 99 100; 7214 99 390; 7227 20 000; 7227 90 950; 7228 20 
190; 7228 20 300; 7228 20 600;   7228 30 
690; 7228 30 890;7228 60 890) against Ukraine Countervailing duty 21 %  WT/ACC/SPEC/RUS/31 
 Page 33 
 
 
 
3.  Antidumping  measures  
 
Flat rolled metal  
 
(Custom Tariff Code –7210 49 90000) against Ukraine and Kazakhstan Provisional 
antidumping 
duty 31,8 % (for Ukraine); 
36,9 % (for Kazakhstan) 
 
176-181 Export Regulations 
- Export Duties 
176-181 A full list of the currently-applied duty rates and the products affected should be 
reinstated in the draft WP report.  We continue to expect Russia to make commitments in this area, as indicated in our previous papers and referenced in paragraph 179 (which should not be in brackets, since these are the views 
expressed by Members). 
176-181 During the December 2002 meeting, the Russian Federation indicated that high 
value products have been removed from the list of products subject to export duties and that the list has been shortened and that it will provide an updated 
list. We would appreciate to have this list for our next Working Party meeting in March 2003. 
176-181 The text should be expanded and updated to include description of Russia’s 
future plans in conjunction with application of tariffs, VAT, and excise changes to exports.  In particular, we seek confirmation that Russia removed some 
export duties and information on Russia’s plans in this regard.  This 
information is necessary whether or not Russia eventually takes any sort of commitment.. 
180 Please explain, in light of improved economic circumstances, if these taxes are 
still necessary for the reasons outlined in the paragraph, i.e., dealing with the external debt?  
- Please clarify whether Russia is still levying VAT on any exported 
products.   
- Please address the efficiency and timeliness of VAT export refunds.  We 
understand that exporters have had difficulties claiming such legally permissible refunds, and that there have been delays in their transmittal, 
without explanation 
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.]" 
176-181 Russian Federation:  
 
Export duties play an import fiscal and regulatory role in the Russian Federation. Export duties payable on a limited number of goods were introduced as a temporary measure to respond to a sharp plunge of the Ruble in August of 1998 which gave the exporters a significant edge in the form of 
additional income over sales of goods on the domestic market to satisfy its WT/ACC/SPEC/RUS/31 
Page 34  
 
immediate needs. 
 We note that export duties do not affect the price of a commodity but rather redistribute a part of additional income of the exporters obtained from export due to a recalculation of foreign currency against the devaluated ruble rate 
encouraging exports. Export duties provided a solution for replenishing the 
revenues of the Budget (which was also required to perform Russia’s international financial commitments) and a trade remedy to protect Russian consumers, i.e. addressed both social and economic needs.   
Statements to the effect that export duties “influence prices”, “distort 
international trade”, “represent indirect subsidies”, “may discriminate against foreign buyers” are, in our opinion, ungrounded.  Export duties is an instrument of trade policy of many WTO Members fully 
consistent with the WTO provisions. The export tariff of the Russian Federation 
was submitted to the members of the Working Party. In this regard the delegation of the Russian Federation reiterated its position that the requests of some WTO Members to phase out export duties either as an instrument of trade policy or under an established time table is beyond the standard requirements towards the acceding country under the existing WTO provisions. 
 
Despite the fact that this instrument of trade policy is essential for purposes to pay the external debt of the Russian Federation, in 2001-2002 the list of goods subject to export duties was reduced more than on 40 per cent, while the simple mean rate of export duties reduced from 10,5 to 6,5 per cent. The products 
subject to export duties and respective duty rates on June, 2002 on 10-digit level 
of HS-2002 were enumerated in the Table attached to WT/ACC/SPEC/RUS/25/Add.2 (Annex I). The list of products subject to export duties containing 680 lines at present included mostly stock exchange products subject to world prices. Thus, export duties could not discriminate against 
foreign buyers and raise the level of export prices. Moreover, the number of 
products subject to export duties would be gradually reduced depending on diminishing the external debt of the Russian Federation. 
182-187 - Quantitative Export Restrictio ns, Including Prohibitions and Quotas 
182-187 Para 182-84: These paragraphs will need updating in light of the draft law on 
the State Regulation of Foreign Trade Activity.  In addition, most of the text of para 73 refers to export requirements and should be incorporated into this Section.    
182 The text of this paragraph says that export bans have been eliminated, which 
directly conflicts with the statement in para 73 that export of unprocessed precious metals and stones is prohibited.  This conflict should be resolved. 
183 Please provide information on any export bans or quantitative restrictions that 
still exist in Russia’s trade regime, e.g., controls on natural gas exports, and 
provide an explanation on how this is consistent with Article XI of GATT 1947.  
Please clarify if any export restrictions remain on  rare earth metals precious stones (natural or processed), and give legislative citations of their existence or repeal.  
- Please explain how, and the degree to which, the Commission for the 
Access to Trunk Oil and Gas Pipelines allocates the distribution of oil and gas between domestic and foreign markets. 
185-186 Please provide information on timber products that are covered by these  WT/ACC/SPEC/RUS/31 
 Page 35 
 
 
measures, and clarification of whether the restricted use of checkpoints for 
exports is more widespread, i.e., are there additional products?  What measures is Russia taking to address the concerns expressed?  We understand that pursuant to the Law “On Gas Supply,” GAZPROM is 
legally obligated to supply the Russian domestic market with gas at a State 
controlled price and that consumers having contracts with GAZPROM enjoy an automatic right of renewal.  In effect, this restricts the quantity of gas available for export.  Please explain how these requirements are consistent with Article XI of the GATT. 
183 We thank Russia for the explanation of natio nal 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. 
182-187 Russian Federation:  
 
The export restrictions that existed in the Russian Federation until they were abolished in 1996, concerned primarily dual purpose goods, military and strategically important goods. Thus, for instance, Resolution of the Russian 
Federation Government No. 854 of November 6, 1992, “On Licensing and 
Quoting of Export and Import of Goods (Works, Services) on the Territory of the Russian Federation” (currently ineffective) provided a list of goods subject to export licensing and quota. Resolution of the Russian Federation Government No. 199 of February 28, 1995, “On Streamlining Exports of Cotton Fibre from 
the Russian Federation” imposed a ban on exports from the Russian Federation 
of cotton fibre purchased abroad which was motivated by the intention to protect the interests of Russian consumers and producers of textiles and other goods, and to protect also the jobs in cotton-processing and related facilities. The ban has been subsequently lifted. 
188-194 - Export Licensing Procedures 
191 & 193 In paragraph 191, Russia indicates that legislative action in the area of export 
licensing is pending.  Can Russia please provide further relevant information?  
Paragraph 193 does not give a sufficient response to the concerns we have raised 
in relation to the licensing of access to oil and gas pipelines for export products.  The assertion that “there were no licensing requirements that govern access to pipelines or other distribution networks so as to restrict the volume of gas and oil exported” has not been supported by any convincing argumentation or evidence.  We therefore reiterate our concerns and our request for a substantive 
response.  
188-191 These paragraphs will need updating in light of the provisions of the draft law 
on the State Regulation of Foreign Trade Activity and subsequent changes to the 
regulations mentioned in paragraph 191.  Does Russia have any licensing requirements for export of fertilizers?  
194 Russia should respond to Members’ request that Russia undertake 
commitments and specifically justify existing restrictions on exports of precious metals and stones, pharmaceuticals, alcohol, and products for plant protection.  
Pending receipt of additional information, it is not clear that these requirements 
are justified under GATT Articles XX or XXI, or other WTO Agreements. 
Table 17 (a) We welcome that Russia is no longer 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 metals and stones, objects made thereof, and WT/ACC/SPEC/RUS/31 
Page 36  
 
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 cert ain alloys, semi fabricates, ores, 
concentrates and wastes. 
- We seek an update on the efforts to amend laws and regulations relating to 
these measures to ensure WTO consistency. 
Members also raised the justification for export restrictions on pharmaceuticals 
(paragraph 189) and restric tions on customs 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 the previous draft of the Working Party report.   
- We seek clarification as to the rea sons 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 exp ort licensing procedures in relation to 
these products have been removed. 
192 We are concerned on practices applied by Russian authorities (licensing 
requirements, practice by specially assigned federal commission) limiting access to oil pipelines and thus effectively prohibiting exports of oil products. We 
believe this is in breach with the provisions of the Article XI of the GATT. 
  We seek inclusion in the Report further explanation how Russia will ensure conformity with the WTO rules and the Article XI of the GATT particularly in this sector? 
194 Russian Federation:  
 Amendments have been made to Decree of the President of the Russian 
Federation of June 21, 2001, No. 742; a draft decree to make additional amendments to Decree 742 concerning exports of ores and concentrates of precious metals has been prepared and is being considered by the Presidential Administration.  
February 6, 2002 was the effective date of Presidential Decree No. 1373 of 
November 30, 2002, “On Approval of the Regulation on Import to the Russian Federation and Export from the Russian Federation of Natural and Cut Diamonds” which contains provisions liberating the diamond market. 
195-199 - Export Financing, Subsidy and Promotion Policies 
198 The assertion made by Russia in Paragraph 198 that pricing practices 
concerning exported natural gas are “commercially based” should either be deleted or balanced by language indicating the very different view taken by WTO Members (cf the section of the report on Pricing Policies).  
195-199 A recent OECD report indicates that Russia has substantially reduced and 
reallocated its subsidies to the coal sector over the past few years.  According to 
the report, State budget finance to the coal sector and adjustment loans to 
support coal sector restructuring in Russia has been reduced from $US1,940 million in 1996 to $US200 million in 2000.  The report provides a breakdown of coal subsidies in 1996 and 2000.  Further to our recent questions on this issue, we would be grateful if Russia could provide responses to the following specific  WT/ACC/SPEC/RUS/31 
 Page 37 
 
 
questions: 
 - Can Russia confirm the figures contained in the OECD report? 
- Is Russia able to provide more recent figures? 
- Could Russia provide details on how the subsidies in the various 
categories referred to in the OECD report are being delivered?  In 
particular: 
 
- Are any of these subsidies linked to production? 
 - Are any of these subsidies contingent upon export performance? 
 
- Could Russia confirm that operating loss subsidies were eliminated by 
the end of 2001, as stated in the OECD report? 
- Could Russia provide details (including timeframes) on plans to phase 
out remaining subsidies? 
- Could Russia provide details on any generic subsidies where coal 
producers are beneficiaries (i.e. subsidies not mentioned in the OECD report)? 
195-199 Russia should provide information on the draft Law on State Aids, outlining its 
provisions, and indicating the extent to which it deals comprehensively with subsidies and outline provisions of the law that address WP concerns, e.g., subcentral subsidies, and subsidies funded by “revenues foregone” by the State, 
e.g., tax exemptions or through state-mandated price controls, as well as through 
direct budgetary outlays.  - To what extent are loans provided under Government Resolution No. 
538 (“On Provisions of Budgetary Loans to Finance the Implementation of High-Return Contracts for Production and Supply of Products, 
Including Export Supplies”) contingent upon export performance? 
- Please discuss the benefits to domestic producers of  price and 
availability of natural gas, particularly to export industries. 
199 Please clarify if Russia intends to invoke Article 29.  Does Russia maintain that it 
has no prohibited subsidies and thus Article 29 is irrelevant? 
- Import Duty Drawback Schemes  
Please clarify if Russia intends to invoke Article 29.  Does Russia maintain that it has no prohibited subsidies and thus Article 29 is irrelevant? 
195-199 We seek the inclusion in this section of the draft Report of fuller responses to the 
concerns raised by Members under paragr aphs 195 and 197, including through the 
provision of detailed information on the nat ure of any industrial subsidies that may 
impact on export industries. 
199 Commitment text of para 199 made much clearer, includes now deferrals of taxes. 
195-199 Russian Federation:  
 The draft law "On State Aid" is in the process of preparation by the federal 
bodies of executive power. The draft refers to relations, affecting competition on the Russian market, which arise in connection with granting and use of the state aid, as well as control over its granting and use. 
 
The definition of state aid includes direct transfer of financial resources, issuance of  loan guarantees, foregone revenue by the state (tax advantages, soft loans), provision by the government of goods or services other than general infrastructure, other forms of support of revenues and prices. 
 WT/ACC/SPEC/RUS/31 
Page 38  
 
The draft contains a list of prohibited types of state aid, which receipt is 
conditional on export activities or import substitution.  
195-199 Russian Federation:  
 
The state support of the coal industry is carried out in accordance with the program of restructuring of the coal sector aimed at acceleration of transfer to 
non-subsidised activities, enforcement of government control and higher 
effectiveness of use of state resources.   As per the resolution of the Government of 03.12.1997 No/1523 "On state financing of restructuring of the coal industry" the priority directions of restructuring are providing for the social security of the employees, secure 
conditions of work in coal mining, and financing of technical measures to 
liquidate the most loss-making and non-perspective coal (shistous) mines. 
 
 
Financing of coal industry 
(million roubles) 2000 2001 2002 
Total 7967.4 6294.8 6998.3
Liquidation of loss-making mines 2076.1 2462.6 2042.0
Social security of employ ees and secure conditions 
of work in coal mining 4373.0 2981.4 4556.3
Production support 1518.3 590.8 -
Subsidising of interest rates on commercial loans  - 260.0 400.0
  
RF Since 2002 the federal budget does not provide allocations for the support of 
production. The main directions  are measures to enhance social security of 
employees and secure conditions of work in coal mining and liquidation of 
particularly loss-making mines. No resources are allocated for export subsidies. These directions will be retained in the future.  
202-208 3. Internal Policies Affecting Foreign Trade in Goods 
- Industrial policy, including subsidy policies 
202-208 Concerning the last sentence of Paragraph 202, can Russia confirm that there 
currently are no export subsidies in place that are based on revenue foregone?  If Russia cannot do so, then the word “budget” should be deleted from this sentence.  In addition, the wording “or import substitution subsidies” should be 
added to the end of the sentence to cover all prohibited subsidies. 
 In connection with paragraph 204, we note that we are still waiting for a response from Russia with more detailed information on certain particular named subsidy programmes that have been brought to the attention of the 
Working Party.  This request was made more than one year ago. 
 Paragraph 205 indicates that relevant legislation is in the pipeline.  We note that this legislation must be in line with WTO requirements (rather than it “should be” as in the text) and invite Russia to provide additional relevant information on this.  
 
In Paragraph 208, the limitation of a commitment in this area solely to “federal and regional subsidy measures identified” is not acceptable.  WTO disciplines apply to all subsidy programmes, including at sub-regional level, whether or not they have been identified in the course of the Working Party’s work.  
Accordingly, this limitation should be deleted.  WT/ACC/SPEC/RUS/31 
 Page 39 
 
 
 
We also request Russia to provide information on the Forestry Industry Development Programme for the Years 2002 – 2015 that was adopted in November 2002.   What specific measures are envisaged to support the development of this industry in Russia?  (NB: depending on the individual 
measures adopted, this support programme could also prompt concerns in 
relation to other areas of the Working Party report, eg registration procedures, export duties, QRs, certification.) 
202-208 We appreciate the work Russia has done with the WP to outline existing 
subsidies.  At the current time, however, we are not prepared to accept as accurate the statement in the last line of this paragraph, i.e., “At present, no budget subsidies existed in the Russian Federation which could be considered as 
export subsidies.” 
205 What does the third sentence mean?  It says that the new law on State Aids 
would unlikely interfere with the Tax law.  Please clarify.  Additional information should be provided on how Russia’s price controls on domestic sales of natural gas suppress the cost of the input to domestic producers, and the relationship of the controlled price to the cost of production 
and transport.   
 In addition, information should be provided on the following specific questions:  Article 4 of the Law on Gas Supply sets out as a basic principle governing 
federal gas supply policies “the creation of conditions for the wide use of gas as a 
. . . raw material for the chemical industry.”   - Please explain the purpose of this policy and how it has been 
implemented. 
 
We are concerned that GAZPROM may not be paying a market price for its 
lease/concession arrangements for the exploration and production of natural gas.   - What are the specific terms and conditions of each type of 
lease/concession currently in effect between the federal and/or regional governments and GAZPROM?   
- How do these terms and conditions differ from each type of 
lease/concession/production sharing agreement currently in effect between the government and private sector companies? 
 Based on GAZPROM’s annual reports, please separate and list GAZPROM’s 
total cost of cost production, distribution, transportation, capital expenditure 
and return on investment.   - Please show how these costs are used to derive the controlled, domestic 
price of natural gas.  How are future investment costs taken into account in setting domestic prices?        
 
Please describe the gas reform plan currently being considered and the timetable for adoption and implementation.  What is the expectation with respect to domestic gas prices in the short- and long-term if the reforms are implemented? 
202-208 Need a  complete picture of RF’s s ubsidies and rules/legislation in subsidies and 
economic effects to get the correct picture of  possible trade effects. This information 
should be based on the notification requiremen ts for subsidies that RF will face as a WT/ACC/SPEC/RUS/31 
Page 40  
 
member of the WTO. 
202-208 This section should include informatio n 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 concern s 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 prici ng 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 subsidizat ion 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 We note that document SPEC/30 provides a response by Russia to the questions 
raised by WTO Members concerning the investment regimes for Production 
Sharing Agreements (PSAs) and Vehicles.  The answers provided do not dispel 
our concerns that aspects of the PSA regime are in conflict with WTO obligations under the TRIMS agreement.  In particular, Russia has not demonstrated that the requirement to place a proportion of all orders for equipment, machinery and supplies with Russian legal entities and for such 
products to be produced on the territory of the Russian Federation does not 
amount to a local purchase requirement prohibited under GATT Article III and the TRIMS Agreement.   In relation to the Vehicles sector, the response in SPEC/30 provides some information on the recently formulated Development Concept
 for the industry.  
However, the form and extent of the intended direct or indirect Government 
support to the industry is not indicated; nor is it clear how far the measures envisaged would pose problems vis-à-vis the WTO TRIMS, Subsidies or other WTO agreements.   We invite Russia to provide more comprehensive information on this concept, including in relation to coherence with specific 
WTO requirements. 
246-250 Please confirm whether Presidential Decree No. 135 of 5 February 1998 "On 
Additional Measures to Attract Investments for Development of Domestic Car 
Marketing" has already been abolished.  If not, please explain when Russia intends to abolish this Decree. 
246-250 -  Regarding Article 44 of the TRIPS Agreement, please explain the 
current legislative situation on establishment of the system for the injunction of imported goods including the infringement of Intellectual Property Rights.  
 
- At the experts meeting on TRIPS in September of 2002, we were 
informed by Russia that further expanding the power of custom authorities is discussing in DUMA.  
- Please explain the updated situation on expanding the power of custom 
authorities. 
 - We understand that Russia is to amend its law related to Intellectual 
Property Rights, including copyright law in order to fully meet the  WT/ACC/SPEC/RUS/31 
 Page 41 
 
 
obligations of TRIPS Agreement  and Berne Convention.  Please clarify 
which points of current these laws have been or need to be amended.  Please provide the schedule of amendments of these laws as well. 
 - d) We recognize that counterfeited goods and pirated works of 
foreign countries are widely distributed in Russia. Please provide us with 
detailed explanation as to what kind of measures the Russian Government will take in order to combat infringement.  In addition, please explain the articles which ensure effective remedies and enforcement system stipulated in TRIPS Agreement.  Moreover, please 
provide the detailed data concerning the market scale of counterfeited 
goods and pirated works and the number of cases that criminal penalties have been applied. 
246-250 Please indicate why the Russian Government has proposed expansion and 
intensification of the existing PSA local content provisions, which Russia has already acknowledged are inconsistent with the Agreement on TRIMS?  
How does Russia intend to address its commitment to eliminate all such 
measures from the date of accession, if it is working to increase the incidence of such measures already in place?  
246 Please provide a description of the provisions of the superceding Government 
Resolution. 
247 We would appreciate more information on how Russia plans to address the 
commitments it has already made to firms to grant incentives for the production of Autos and Aircraft, and for output under the Production Sharing Arrangements if, as is stated, Russia is also committed to eliminating 
the laws that authorize granting such incentives. 
246-250 We welcome the additional information provided by Russia in relation to 
production-sharing agreements (PSAs). 
- What steps will Russia take to bring Article 7 of the Federal Law on 
"Production Sharing Agreements" into compliance with GATT Article III (also see annex to the TRIMS Agreement)? 
246-250 Additional information on  production sharing is still nece ssary in this chapter. The 
provision for some obligations of forei gn 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. Information 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 issu e of production sharing agreements. 
248 Regarding TRIMS we feel that the question 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:  
 
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 WT/ACC/SPEC/RUS/31 
Page 42  
 
law. A production sharing agreement is a contract  by which the Russian Federation provides to a 
business, in consideration for a compensation 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 investor undertakes to perf orm the said works at own risk and expense. 
 
Federal Law «On Production Sharing Agreements» has been amended and supplemented twice 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, introduced 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 authorities 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 en visaged by the agreement) technologies purchased 
by the investor must be produced on th e 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» pr oviding that a certain value of orders (as a 
percentage of total investment) for equipment, ma chinery and supplies purchased by the investor 
during the periods of time or phases of work prov ided 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 Produ ction 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 for 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, incl uding profit tax and royalty, for the investor 
with a single tax. The draft law provides a mo re 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 Resolutio n of the Government of the Russian Federation 
of August 30, 2001, No. 1155-r appointing the State Unitary Enterprise «Russian Foreign Economic Association «Zarubezhneft» 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 affecting impor t or export by private businesses]. 
 The agreements are valid nowadays:  - Production sharing agreement on Chayvinskoe , Odoptinskoe and Ar kutun-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 production on Ha ryaginskoe oilfield, Project "Samotlorskoe 
field". 
 Based on the Presidential Decree No. 135 of  5 February 1998 "On Attracting Additional 
Investments to Promote the Automobile Indust ry" and the Government Resolution No. 413 of  WT/ACC/SPEC/RUS/31 
 Page 43 
 
 
23 April 1998 "On Additional Measures to A ttract Investments for the Development of the 
Domestic Automotive Industry" there w ere 4 investment agreements concluded: 
- with Finance and Industry Holding «Donin vest» 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 Federa tion of July 16, 2002, No. 978-r approved the 
Development Concept of the Russian Car-Maki ng 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 with  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 prior ities of the sectoral development to satisfy the 
requirement of the domestic market, develop produ ction capacities, increase export of motorcars 
and ensure national security. The 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 w ith the international car-making, and improved 
effectiveness of production of modern competitive motorcars satisfying the needs of the population 
and the economic actors. Among the basic prov isions of the Concept are the following. 
 
Improved competitiveness of motorcars may be achieved thro ugh institutional changes, 
development of production of hi-tech component parts and materials, application of state standards compatible with international requirements, improvement of R&D and labour 
components.  
Confirmation of conformity of motorcars, compon ents and spare parts to the existing standards 
takes the form of voluntary certification or declaration by the manufacturer or the seller. 
Voluntary certification of products of car-making  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-making 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 dom estic market with competitive machinery. 
 The Concept deems it reasonable to keep the pr esent import customs duty rates for new cars and 
those that have been used for up to 7 years, unchanged for a seven-yea rs transition period. The 
said transition period should be sufficient fo r the Russian Federation to improve domestic 
production so that it may become competitive on  the domestic and foreign markets. Special 
attention should be given to creating capacitie s to produce competitive hi-tech automobile 
components. 
 WT/ACC/SPEC/RUS/31 
Page 44  
 
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 have been used for more than 7 years will be made subject to 
higher insurance premiums and charges for the 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 characteristic s correspond to long-term international norms. 
 
Customs duties for imported components and materi als for industrial assembly of cars must be 
optimised. This will allow reducing the cost of su ch 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 development of domestic car-making include, among others: 
 
- to create new effective production facilities to  manufacture automobile components in the 
existing and future federal target programmes; 
- to develop a Russian-Byelorussian program fo r 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 project s in the territory of the Russian Federation 
involving foreign car-makers; 
- to introduce an insurance system of motorcars an d 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 produced 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 motorcars for government needs. 
251-259 State-trading enterprises ("STEs") 
256-257 The responses provided in paragraph 257 do not satisfactorily address the 
concerns previously raised by WTO Members, including ourselves (eg identified in paragraph 256).  We invite Russia to respond more fully. 
251-259 -  Russia should list the entities that qualify as state trading enterprises 
(STEs), and briefly describe their 
- activities. 
- The suppression of domestic energy prices through price controls and 
other means should be included in the list of practices of concern. 
- Russia should explain the role of unitary enterprises in the context of 
import and export activity.  In particular, whether unitary enterprises are concentrated in certain sectors and/or could affect trade in such 
goods and services. 
 We recognize that both Paras 258 and 259 need revision to be more precise about what is being sought and agreed.    
Some reports have suggested that the state-owned telephone company  WT/ACC/SPEC/RUS/31 
 Page 45 
 
 
Svyazinvest , has required its Russian cable suppliers to procure optical fiber 
from a single supplier as a reward for that supplier’s agreement to produce cable in Russia at a later date.    - Given Svyazinvest’s influential market position, please explain how this 
is consistent with GATT Article XVII? 
- Specifically, does Svyazinvest have special or exclusive privileges granted 
by the State?  Are there plans to restructure or to privatize Svyazinvest?  
Does the Russian Government have a specific policy regarding the privatization of infrastructure companies?, e.g., Svyazinvest?  Is there 
any prospect for private control of Svyazinvest? 
 The cost of producing natural gas for GAZPROM, a state-trading enterprise, has been estimated to be approximately $41 per tcm (see, United Financial Group, GAZPROM: The Kremlin’s Choices, May 2002) compared to controlled 
domestic prices of $16 per tcm.   
 - In light of these facts, please explain how GAZPROM is selling gas in the 
domestic market “solely in accordance with commercial considerations”  as required by Article XVII:1(b) of the GATT.  
- What steps does the Russian Government plan to take to address the 
disparity between the cost of production and domestic price?  When will 
this happen? 
 We also understand that GAZPROM holds monopoly rights for exporting gas into Europe.  What steps does the Russian Government plan to take to ensure 
that GAZPRM can and does act in conformity with GATT Article XVII, i.e., 
decisions on export are made based on commercial considerations, particularly in the light of pricing policies and domestic consumers rights to renew contracts? 
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 oth er state-trading enterprises is necessary 
to evaluate whether the commitment 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 state did not interfere into the substance and form of these contracts” .  Our understanding is that the Russian 
Government approval or ratification of Alro sa’s marketing arrangements is required 
prior to export. 
- We ask that Russia provide a full description of the procedures relating to 
Alrosa’s ability to enter into commercial contracts, how adequate opportunity is afforded to the enterp rises 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 the relevance of the Understanding on 
the Interpretation of Article XVII of GATT 1994, which cont ains 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 Memb ers in paragraphs 255 and 256. 
260-267 - Free Zones and Special Economic Zones WT/ACC/SPEC/RUS/31 
Page 46  
 
260-267 We await a response to the information request we submitted bilaterally more 
than a year ago (as part of the general exercise on Subsidies referred to above). 
260-267 Russia has described a system where certain sales from Kaliningrad and 
Magadan into the rest of Russia are not subjected to tariffs and taxes.    - WP member concern that the imported component of goods produced in 
free zones but eventually sold inside the home country should be subject 
to normal customs formalities when entering the rest of the country, including the application of tariffs and taxes, at least to the imported component.  Russia should indicate how it intends to address this problem? 
- Please provide specific information on whether, and the extent to which, 
incentives granted to firms establishing in the zones are based on any 
kind of export performance or local content requirements. 
260 The new information on the application of duties and taxes to goods produced in 
the Kaliningrad and Magadan zones sold in the rest of Russia will require additional discussion, as it appears that such application is suspended under certain criteria.    
- Under these circumstances, the commitment in para 267 does not 
conform to the information provided, and therefore we seek additional information as to how Russia intends to harmonize its practices.  E.g.,: 
  -- What level of change in commodity classification constitutes 
“sufficient processing?”   
 -- If no duties are paid on input products processed in the zones 
and later “exported” to other regions of the Russian Federation, this may be an actionable subsidy subject to notification.  
 – To what extent are benefits provided in special economic zones 
contingent upon use of domestic rather than imported inputs?   
 -- To what extent are benefits provided in special economic zones – 
with the exception of custom duty exemptions on imported inputs and final stage sales taxes – contingent upon export performance?  
 
- These are important questions that should be answered to determine if 
such benefits engage WTO provisions and should be eliminated or amended prior to accession. 
260-267 We seek the inclusion in this section of  the draft Report of responses to the questions 
raised by Members in paragraph 263 a nd 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 establish an acceptable basis upon which the 
Russian Federation’s agricultural commitments could be founded, consistent with the 
requirements set out in WT/ACC/4. 
280-281 - Trade in Civil Aircraft 
280-281 Russia should provide additional information on its current activities, e.g., 
licensing and tariff suspensions, to increase market access in Russia for aircraft. 
  WT/ACC/SPEC/RUS/31 
 Page 47 
 
 
The text should record that a number of members support a commitment by 
Russia to join the Agreement on Trade in Civil Aircraft upon accession. 
282-284 - Textiles  
282-284 We again request that Russia accept the language set forth in paragraph 283 of 
the RUS/25/Rev1.  The purpose of this language is to establish the basis for implementing article 2 of the Agreement on Textiles and Clothing and application of the growth provisions for Russia’s quotas.  The quantities provided for in bilateral textile agreements in place at the time of accession 
become the starting points for the liberalizations provided for in the ATC.  Such 
language has been included in the protocols of several accession applicants and the Textile Monitoring Board  has reviewed the language in the context of two other accessions.  
Paragraph 284 should be deleted. 
 WT/ACC/SPEC/RUS/31 
Page 48  
 
ANNEX 
 
 
List of the Countries, in the Trade-Political Relations 
 
with which the Russian Federation Applies Most-Favoured-Nation treatment  
 
 1. Australia                      65. Libya 2.  Austria                        66.  Liberia 3.  Albania                        67.  Lithuania 
4.  Angola                         68.  Luxemburg 
5.  Argentina                      69.  Mauritius 6.  Afghanistan                    70.  Mauritania 7.  Bangladesh                     71.  Madagascar 8.  Belgium                        72.  Macedonia 
9.  Benin                          73.  Malaysia 
10.  Bulgaria                      74.  Mali 11.  Bolivia                       75.  Malta 12.  Bosnia and Herzegovina        76.  Morocco 13.  Botswana                      77.  Mexico 14.  Brazil                        78.  Mozambique 
15.  Burkina Faso                  79.  Mongolia 
16.  Burundi                       80.  Myanma 17.  Great Britain                 81.  Nepal 18.  Hungary                       82.  Nigeria 19.  Venezuela                     83.  Netherlands 
20.  Vietnam                       84.  Nicaragua 
21.  Gabon                         85.  New Zealand 22.  Guyana                        86.  Norway 23.  Gambia                        87.  Pakistan 24.  Ghana                         88.  Panama 25.  Guinea                        89.  Peru 
26.  Guinea-Bissau                 90.  Poland 
27.  Honduras                      91.  Portugal 28.  Grenada                       92.  Rwanda 29.  Greece                        93.  Romania 30.  Denmark                       94.  Salvador 
31.  Djibouti                      95.  Sao Tome & Principe 
32.  Egypt                        96.  Singapore 33.  Zaire                         97.  Syria 34.  Zimbabwe                      98.  Slovak Republic 35.  Zambia                        99.  Slovenia 36.  Israel                        100.  Somalia 
37.  India                         101.  Sudan 
38.  Indonesia                     102.  USA 39.  Jordan                        103.  Sierra Leone 40.  Iraq                          104.  Thailand 41.  Iran                          105.  Tanzania 
42.  Ireland                       106.  Tunisia 
43.  Iceland                       107.  Turkey 44.  Spain                         108.  Uganda 45.  Italy                         109.  Uruguay 46.  Yemen                        110.  Philippines 
47.  Cabo Verde                    111.  Finland  WT/ACC/SPEC/RUS/31 
 Page 49 
 
 
48.  Cambodia                      112.  France 49.  Cameroon                      113.  FRG 50.  Canada                        114.  Croatia 51.  Qatar                         115.  Chad 52.  Kenya                         116.  Czech Republic 
53.  Cyprus                        117.  Chile 
54.  China                         118.  Switzerland  55.  Columbia                      119.  Sweden 56.  Congo (Brazzaville)           120.  Sri Lanka 57.  Korea (KPDR)                  121.  Ecuador 
58.  Korea (Republic)              122.  Equatorial Guinea 
59.  Costa Rica                    123.  Ethiopia 60.  Cuba                          124.  Republic of South Africa 61.  Kuwait                        125.  Jamaica 62.  Laos                          126.  Japan 
63.  Latvia                        127.  European Community and European  
64.  Lebanon    Atomic Energy Community   WT/ACC/SPEC/RUS/31 
Page 50  
 
List of the Developing Countries which are users of the
 
Scheme of the Preferences of the Russian Federation  
(with the Amendments and Addenda of 26 March 1997 and 24 March 1999) 
 1.  Albania                             57.  Marshall Islands 
2.  Algeria                              58.  Mexico 
3.  Angola                               59.  Micronesia 4.  Antigua and Barbuda                  60.  Mongolia 5.  Anguilla                             61.  Montserrat 6.  Argentina                            62.  Namibia 
7.  Aruba                                63.  Nauru 
8.  Bahama Islands                       64.  Nigeria 9.  Barbados                             65.  Netherlands Antilles 10.  Bahrain                             66.  Nicaragua 11.  Belize                              67.  Nine 
12.  Bermuda Islands                     68.  United Arab Emirates 
13.  Bolivia                             69.  Oman 14.  Brazil                              70.  Saint Helena 15.  British Virgin Islands              71.  Turks and Caicos Islands 16.  Brunei                              72.  Pakistan 17.  Venezuela                           73.  Panama 
18.  Vietnam                             74.  Papua New Guinea 
19.  Gabon                               75.  Paraguay 20.  Guyana                              76.  Peru 21.  Ghana                               77.  Romania 22.  Guatemala                           78.  Salvador 
23.  Honduras                            79.  Saudi Arabia 
24.  Hong Kong                           80.  Swaziland 25.  Grenada                             81.  Seychelles 26.  Dominica                            82.  Senegal 27.  Dominican Republic                  83.  Saint Vincent and  28.  Egypt              the Grenadines 
29.  Zimbabwe                            84.  Saint Christophes and Nevis 
30.  India                                       and Nevis 31.  Indonesia                           85.  Saint Lucia 32.  Jordan                              86.  Singapore 33.  Iraq                                87.  Syria 
34.  Iran                                88.  Slovenia 
35.  Cayman Islands                      89.  Suriname 36.  Cameroon                            90.  Thailand 37.  Qatar                               91.  Tokelau 38.  Kenya                               92.  Tonga 39.  Cyprus                              93.  Trinidad and Tobago 
40.  China                               94.  Tunisia 
41.  Korea (KPDR)                        95.  Turkey 42.  Colombia                            96.  Uruguay 43.  Congo                               97.  Fiji 44.  Korea (Republic)                    98.  Philippines 
45.  Costa Rica                          99.  Croatia 
46.  Cote d'Ivoire                       100.  Chile 47.  Cuba                                101.  Sri Lanka 48.  Kuwait                              102.  Ecuador 49.  Cook Islands                        103.  Yugoslavia               
50.  Lebanon                             104.  Jamaica  WT/ACC/SPEC/RUS/31 
 Page 51 
 
 
51.  Libya                               105.  Bulgaria 52.  Mauritius 53.  Macedonia 54.  Malta 55.  Malaysia 
56.  Morocco 
 WT/ACC/SPEC/RUS/31 
Page 52  
 
List of the Least Developed Countries which are users of the 
 
Scheme of the Preferences of the Russian Federation  
 1.  Afghanistan                         27.  Mali 2.  Bangladesh                          28.  Maldives 
3.  Benin                               29.  Mozambique 
4.  Burkina Faso                        30.  Myanmar 5.  Burundi                             31.  Nepal 6.  Botswana                            32.  Niger 7.  Bhutan                              33.  Rwanda 
8.  Vanuatu                             34.  Western Samoa 
9.  Haiti                               35.  Sao Tome and Principe 10.  Gambia                             36.  Solomon Islands 11.  Guinea                             37.  Somalia 12.  Guinea-Bissau                      38.  Sudan 
13.  Djibouti                           39.  Sierra Leone 
14.  Zaire                              40.  Tanzania 15.  Zambia                             41.  Togo 16.  Yemen                              42.  Tuvalu 17.  Cabo Verde                         43.  Uganda 18.  Cambodia                           44.  Central African Republic 
19.  Kiribati                           45.  Chad 
20.  Comoro Islands                     46.  Equatorial Guinea 21.  Laos                               47.  Ethiopia 22.  Lesotho 23.  Liberia 
24.  Mauritania 
25.  Madagascar 26.  Malawi   
__________