November 1999

ANALYSIS OF RUSSIAS NEW FOREIGN INVESTMENT LAW

OPPORTUNITIES IN THE

RUSSIAN PACKAGING SECTOR

by Sergey Minko

(continued on p. 5)

(continued on p. 4)

by David M. Wack

On July 9, 1999, President Yeltsin signed into law the

new Russian Foreign Investment Law (FIL). The new FIL

replaces the previous FIL, which had been in effect since

1991. In general, the new FIL offers many of the same

protections provided by the previous law, with a few notable additions, including a new tax stabilization clause

and greater detail on the use of branch offices in Russia.

Although the new FIL offers protection to all forms of foreign investment, a number of its provisions are expressly

designed to promote “direct” foreign investment, which is

defined as (1) the acquisition of a more than 10 percent

stake in a Russian commercial entity, (2) investment in a

branch of a Russian legal entity, or (3) leasing of certain

electric and transportation equipment (including aircraft).

In response to the financial crisis of August 1998, Russia

is encouraging such forms of direct investment as preferable to portfolio investment.

Tax Stabilization Protection

The tax stabilization protection of the new FIL is its

principal innovation. Although the protection is fairly

strong, its efficacy is still somewhat uncertain, particularly in the absence of implementing regulations and the

presence of ambiguities in the law. Under the new FIL, the

enactment of any new laws or regulations that change the

amount of certain federal taxes, customs, and other mandatory payments, or amendments to existing laws and regulations that increase the total tax burden on or otherwise

limit foreign direct investment, is not applicable until

recovery of investment (as determined by implementing

regulations to be enacted by the Russian Government). Protection under this clause appears to be available only to

Russian commercial entities engaged in “priority investment projects,” which are defined as projects in which total foreign investment is at least $40 million, or foreign

equity investment is at least $4 million, in industry sectors

specified by the Russian Government. However, the language of other provisions in the new FIL suggests that

tax stabilization is intended to apply to all direct foreign

investment projects in which foreign investors hold a 25

percent equity stake, regardless of size or industry. This

ambiguity will need to be addressed in implementing

regulations or through amendments to the new FIL.

Although the stabilization protection covers the majority of applicable federal taxes, a few significant taxes

are not covered, including excise taxes and value-added

Russia’s packaging industry, which imports some

$2 billion worth of foreign packaging materials and

equipment annually, increasingly needs modern packaging materials and machinery to improve the look and

quality of packaging and make domestic products more

competitive with imported packaged goods. Currently,

only a few U.S. companies participate in this market.

Current Russian customs duties favor the importation of finished packaging materials, rather than stimulate domestic production from imported or domestic raw

materials. Nonetheless, many Russian companies are

looking for ways to develop and improve local production of finished packaging materials. Demand for both

packaging materials and machinery provides U.S. companies with trade and investment opportunities.

Update on the Packaging Materials Sector

Although Russia possesses the raw materials rePublished by the Business Information Service for the Newly Independent States (BISNIS)

U.S. Department of Commerce • International Trade Administration

BISNIS

BULLETIN
BISNIS BULLETIN - November 1999

2

BISNIS is an information center for U.S. companies doing business in the Newly Independent

States of the former Soviet Union. Operated by the Market Access and Compliance unit of

the International Trade Administration, BISNIS disseminates information in print form, electronically, and through consultations by its staff of trade specialists. For more information,

please contact:

202-482-4655 (phone)

202-482-2293 (fax)

bisnis@ita.doc.gov (email)

To call BISNIS toll free, dial

1-800-USA-TRAD (872-8723)

press 3 and then press 2

or visit the BISNIS Online website at

www.bisnis.doc.gov

BISNIS

The Business Information Service for the Newly Independent States

In This Issue

Analysis of Russia’s New Foreign

Investment Law

Opportunities in the Russian

Packaging Sector

BISNIS Joins the USA Trade Ctr.

Letter from the U.S. Ombudsman

Tricks of the Trade: Need to Russify

Your Brand?

Regional Corner: Saratov Oblast,

Russia

Agency Spotlight

Trade Events Calendar

Articles by non-U.S. Government employees express the views of the authors and

should not be construed as a statement of U.S. Government policy.

Director

Anne Grey

Deputy Director

Trevor Gunn

Managing Editor

 Ellen S. House

Assistant Editors

Juliana Kinal, Kelly Raftery

Contributors

Shane Farrell, Alexander Gordienko,

Jan Kalicki, Sergei Minko, David Wack

BISNIS Joins the USA Trade Center

As most of our readers are probably aware, in May 1999, BISNIS moved from the main Department of Commerce

Building across 14th Street to the USA Trade Center in the Ronald Reagan Building & International Trade Center. The

USA Trade Center aims to bring together Commerce’s most widely used, customer-driven programs under one banner. It offers a single, easily accessible place for U.S. companies to take advantage of the full range of Commerce’s

export assistance programs.

The USA Trade Center houses several trade-related services programs in addition to BISNIS, including the Trade

Information Center (TIC), the Central and Eastern Europe Business Information Center (CEEBIC), STAT-USA®,

the Export Research & Assistance Center (ERAC), Multilateral Development Bank Operations (MDBO), Bureau

of Export Administration (BXA), the Trade and Business Information Bookstore, and the Trade Reference Assistance Center (TRAC). These offices offer general export information and referrals to all U.S. Government export

programs, country-specific counseling and information covering the entire world, information on opportunities available from multilateral development banks, advice on export regulations and procedures, information on U.S. and Foreign Commercial Service offices in the United States and abroad, and an in-house reference center and bookstore.

More information on the USA Trade Center can be found on its website at http://usatc.doc.gov or by calling the center

at 1-800-USA-TRADE (872-8723).

CALL BISNIS

TOLL-FREE!

BISNIS trade specialists can

now be reached at the USA

Trade Center via a toll-free

number. Dial 1-800-USA-TRADE

(872-8723), then press the

pound sign (#), then dial the

specialists 5-digit extension

and press # again.

Anne Grey 22299

Trevor Gunn 24656

Trade specialist extensions:

Philip de Leon 22109

Ellen House 22284

Juliana Kinal 23729

Joan Morgan 22709

Derek Nowek 24522

Kelly Raftery 24199

Judith Robinson 22022

Karen Rubeiz 22047

Tanya Shuster 22036
BISNIS BULLETIN - November 1999

3

LETTER FROM THE U.S. OMBUDSMAN

The Russian economy has begun to stabilize, following the economic crisis of August 1998, but there is still a

considerable amount of work to be done before foreign—

and Russian—investors’ confidence in Russia begins to

return. We need to keep in mind that the transformation

of Russian society is a very complicated task that will

likely take a generation to complete. There have been,

however, positive developments in the U.S.-Russian relationship, and you, the business community, are a large

part of this picture. In June, I cochaired the fourth annual

meeting of the U.S. West Coast-Russian Far East Ad Hoc

Working Group (AHWG) in Vladivostok, in which over

200 Russians and Americans participated. A key result

of this meeting was an expansion of the CLEAR-PAC

project, which streamlines customs procedures in the Russian Far East. Representing Vice President Gore, I was

present at the July 30 celebration of the first oil output

from the Sakhalin II project—the first oil to come from a

production-sharing agreement (PSA) to develop deposits

offshore Sakhalin Island. Even in the midst of economic

difficulties, clear progress is being made.

Rule of Law

We have now completed a draft Handbook on the

Russian Commercial Arbitration System. We have also

drafted the Basic Guidelines for Codes of Business Conduct, designed to promote good business practices and

ethical behavior in commercial relations between private

firms, as well as with government authorities. Both of these

works in progress have been presented at international

roundtables and conferences and have received strong

support from Russian and Western businesspeople and

government officials. This fall, building on this success,

we initiated a project on the Handbook on Corporate

Governance and Shareholder Rights, and are encouraged

by the broad, positive response to this idea. These concrete steps are aimed at developing a functioning rule of

law and court system that will provide greater protection

for business and assist in the fight against corruption.

Regional Cooperation

As many of you are well aware, some of the Russian

regional governments have proved more successful than

Moscow in establishing a market economy and providing

a business climate that encourages foreign investment.

During the past year, I have visited many regional capital

cities—Novgorod, Irkutsk, Yuzhno-Sakhalinsk,

Yekaterinburg, and Perm—and have noted regional officials offering tax and other incentives to attract investors,

Russian and foreign alike, to their cities. Other regional

governments are working hard to have projects approved

as PSAs by the federal government.

Commercial Energy

As evidenced by Sakhalin II’s first oil, the PSA framework is beginning to produce tangible results, and the

Russian Government is currently working on the normative acts needed to support this framework. The Duma is

moving toward authorizing more projects to move forward under a PSA by adding those projects to the “Law

on Lists.” There is still much to be done, such as revising

the tax code to fit the PSA structure and reducing tariffs,

and the U.S. Government remains committed to working

with you to meet these challenges.

We are encouraging the Russians to work with us, as

well as with other Western countries, on projects that could

significantly benefit the regions. Moreover, we continue

to pursue private-public sector partnerships that will prove

beneficial to both U.S. companies and Russia.

The task ahead—to transform Russia into a growing

free-market democracy—is enormous. There have been

successes, but still far too few. Nonetheless, the best way

to pursue this transformation remains the same—and centers on the private sector. The U.S. Government will continue to be actively engaged in pursuing the reforms Russia needs to move forward—and to support your efforts

as you continue to play such a critical role in the process.

Jan H. Kalicki

Counselor to the Department of Commerce and

U.S. Ombudsman for Energy and Commercial

Cooperation with the New Independent States

The U.S. Department of Commerce and the Software

and Information Industry Association present:

SEMINAR ON INTELLECTUAL PROPERTY

IN ELECTRONIC COMMERCE

November 10, 1999

Radisson Slavyanskaya Hotel, Moscow

November 12, 1999

Sheraton/Nevsky Palace, St. Petersburg

For more information, contact

Moscow: Maria Breiter, tel +7 (095) 737-5030

Petersburg: Maria Chernobrovkina, +7(812)326-2560

Washington, DC: Daniel Valverde, tel: (202) 482-0573,

or email: daniel_valverde@ita.doc.gov.
BISNIS BULLETIN - November 1999

4

(RUSSIAN FIL, continued from p. 1)

NOTICE

The BISNIS Bulletin is now available

in both html and pdf (Adobe Acrobat)

formats on BISNIS’ website at

www.bisnis.doc.gov/bisnis/

bulletin.htm#bulletin.

tax (VAT) on domestically produced goods and Pension Fund

contributions. In addition, it should be noted that the stabilization protection does not apply to regional or local taxes.

However, regional and local governments have considerable

authority to grant tax incentives for these taxes.

The new FIL calls for the Russian Government to enact

a series of regulations implementing the tax stabilization protections, including regulations governing the procedures for:

determining whether a change in law has an adverse or limiting impact; registering priority investment projects; and

oversight of foreign investors’ compliance with investment

commitments.

Other Relevant Provisions of the New FIL

1. Application and Definitions. The definition of foreign investor in the new FIL includes legal entities,

noncorporate entities, and individuals, as well as international

organizations acting under international agreements and foreign governments. Investment is defined broadly to include

cash, securities, property, property rights, intellectual property, services, and information. Specifically excluded from

the definition are investments in banks and other credit organizations, insurance companies, and nonprofit organizations

for the purpose of socially desirable objectives, which are to

be governed by separate laws. The protections of the new FIL

also apply to branches of foreign investors and commercial

entities in which foreign investors participate, but not to subsidiaries or affiliated companies of the latter.

2. National Treatment. Under the new FIL, foreign investors are guaranteed the same legal rights and privileges

available to Russian residents, subject to limitations or benefits that may be established by Russian law.

3. Expropriation and Compensation of Losses. Like the

previous law, the new FIL protects foreign investors against

expropriation and nationalization of their property. However,

unlike the previous law, it does not enshrine the principle of

“prompt, adequate and effective compensation,” which is

widely regarded as the international standard; rather it merely

requires that the investor be compensated for the value of its

property without indicating the timing, method of determining value, or currency of compensation.

4. Repatriation of Profits. Under the new FIL, a foreign investor is guaranteed unrestricted use of its after-tax

income, both within Russia and abroad.

5. Preferential Treatment. Except for tax stabilization

protection, the new FIL does not grant any tax or customs

concessions to foreign investors. Priority investment projects

are eligible to receive tax and customs benefits in accordance

with Russian tax and customs law. Currently, however, Russian tax and customs laws do not contemplate any special tax

concessions for large-scale investments. The new FIL underscores the ability of regional and local governments to offer

tax and other incentives to foreign investors.

6. Foreign Personnel. Unlike the 1991 law, the new

FIL does not explicitly address the issue of employment of

foreign personnel, but implies that such employment is permitted by stating in the preamble that one of its purposes is

attracting foreign managerial experience. Moreover, unlike

the previous law, the new FIL does not guarantee import customs duties exemptions for personal effects of expatriate

employees.

7. Dispute Resolution. The new FIL provides that a

foreign investor is guaranteed the right to settle disputes arising out of its investment or business activities in Russian

courts or through arbitration in Russia or abroad. Unlike the

previous law, the new FIL does not differentiate between disputes with private entities and the Russian Government.

8. Registration and Accreditation. The new FIL removes the separate national registration requirement of the

previous law for Russian companies with foreign investment.

It now appears that such companies are to be registered with

the local registration bodies in the same manner as purely

Russian companies. In addition, the new FIL spells out in

greater detail the procedures for accreditation, operation, and

liquidation of branch offices of foreign companies, an area

that previously lacked any meaningful legal guidance.

On the whole, the new FIL reiterates in a more succinct

fashion many of the protections that have been available to

foreign investors in Russia for over 8 years and eliminates a

number of provisions of the previous law that became inconsistent with subsequent Russian laws. The new FIL’s principal innovation—the tax stabilization provision, although not

without its flaws, is a positive step toward mitigating one of

the greatest uncertainties related to investment in Russia.

David Wack is a member of the CIS Practice Group of Squire,

Sanders & Dempsey LLP in Washington, DC.

For a lengthier analysis of the new Russian FIL, visit BISNIS

Online at www.bisnis.doc.gov/bisnis/isa/isa.htm#Kisa.
BISNIS BULLETIN - November 1999

5

(PACKAGING, continued from p. 1)

quired for domestic production of various packaging materials, current government tax and import duty policies hinder

development of local production of packaging materials. The

customs duty for imported finished packaging materials is

set at 5-10 percent, while the customs duty for supplies to be

used in creating the packaging is 15 percent.

Russia imports almost all types of packaging materials.

Although Russian producers meet as much as two-thirds of

demand in the overall packaging materials market, over a

billion dollars worth is imported. Companies that sell printed

materials and packaging films are most successful in this

market, selling $290 million worth to Russia in 1997. Foreign suppliers provide 25 percent of the corrugated market

($75 million annually), 40 percent of cardboard boxes ($82

million annually), 65 percent of cardboard, 45-55 percent of

labels, and 70 percent of label paper.

According to Yury Alpeev, marketing director of packaging materials company Gotek, before the August 1998 financial crisis, Russian companies imported foreign packaging machinery and packaging materials worth $1.8-2.3 billion annually. Half of this amount was packaging ($0.9-1.2

billion a year) and half was packaging materials ($0.8-1.04

billion annually). In 1998, imports of wrapping films, PET

bottles, stickers, and metal cans increased about 30 percent

over 1997, but have declined 40 percent since the crisis.

Among the major exporters to Russia in this sector are

Italy (30 percent of total packaging materials), Germany (17

percent), and Finland (11 percent). Imports of U.S. packaging materials accounted for only 4 percent. One of the major

U.S. export products to Russia is ScotchTM-type packaging

tape, accounting for $15.7 million.

Packaging Industry Situation by Market Sector

The demand for packaging varies greatly by sector. Nearly

all sectors need upgraded products and equipment, but only a

few sectors are experiencing vigorous demand at this time.

Confectionery—Confectionery packaging is one of the most

developed segments of the industry. Although some leading

confectioneries use modern packaging technologies and pack

their products very attractively, most confectioners lack modern packaging technologies to extend product shelf life.

Bakery—The majority of Moscow’s bakeries supply retail outlets with products packed in plastic bags or wrapped in plastic

film, but little bread is distributed under sealed and branded

product lines. Many regions are following Moscow’s example

by requiring bakery products to be wrapped for sale, thus creating the need for new packaging materials and equipment.

Dairy—Russian dairies rely heavily on modern packaging.

Moscow is the leader in introducing dairy packaging technologies, while the bulk of dairy products produced in the

regions is still packed in plastic bags and glass bottles. Therefore, most domestically produced dairy products are

uncompetitive in the market. Milk processing plants could

significantly improve production by purchasing Pure Pak or

Tetra Pak-type milk processing and packaging lines.

Household chemicals and paints—Enterprises in this sector

usually use simple plastic and glass containers for household

chemicals and metal cans for paints. To be more competitive

with imported products, Russian producers must significantly

improve quality and add convenience features such as handles,

measuring scoops, and printed instructions.

Prospects for U.S. Companies

The overall improvement of the Russian economy will

provide U.S. packaging equipment companies and packaging producers with enormous opportunities to increase exports to Russia through direct sales, leasing, and investments.

Many Russian companies welcome foreign investment, and

some foreign companies have already invested in packaging

raw material companies. For example, in 1998, International

Paper (Purchase, NY) acquired 80 percent of the Svetogorsk

Pulp and Paper Mill, which reportedly produces 293,000 tons

of paper and cardboard annually.

Another sign of the favorable investment potential of Russian companies is the success of the Russian company Gotek

(one of the leaders in producing corrugated cardboard). Gotek

uses modern equipment to provide packaging materials for

major U.S. companies operating in Russia, including Procter

& Gamble, Mars, McDonald’s, and Coca-Cola, and for several large Russian companies. Other Russian companies such

as Poligrafooformlenie, MKPG, Polipak, and Dozakl have

attracted investments to renew their production facilities.

Overall, Russian industry experts believe that Russian packaging companies have the potential to attract up to $8 billion

in foreign investment.

Those U.S. packaging equipment and materials companies that want to expand their business in Russia or enter the

Russian market should be more aggressive. Strategies that

have proved successful include participating in local trade

shows, establishing representative offices or representation

by Russian dealers and distributors, and marketing products

more widely and persistently.

Sergey Minko is a commercial specialist with the Foreign

Commercial Service at the U.S. Embassy in Moscow.

For more information on FCS Moscow services and the Russian packaging equipment and materials market, U.S. exporters may contact Sergey Minko at tel: +7 (095) 737-5038,

fax: 737-5033, email: Sergey.Minko@mail.doc.gov, or visit

BISNIS Online at www.bisnis.doc.gov/bisnis/isa/990702pk.htm.
BISNIS BULLETIN - November 1999

6

TRICKS OF THE TRADE

Need to Russify Your Brand?

by Shane Farrell

For foreign businesses introducing products to the Russian market, how best to “Russify” their brand is a common,

yet critical dilemma. Qualitative research conducted by FSquared Market Research + Consulting for a leading ad

agency in Moscow set out to answer this question. Researchers wanted to understand whether imported brands need to

be Russified and the best ways to achieve this goal. Other

objectives were to discover what constitutes a brand for Russian consumers as well as the perceived differences between

Russian versus imported brands.

Last October, F-Squared researchers organized 12 focus

groups made up of male and female participants of various

ages, looking at brands across numerous categories. They

conducted focus groups in Moscow, Yekaterinburg, and

Nizhny Novgorod.

Highlights

l The Russian consumer does not really understand what

constitutes a brand.

l Quality is the key differentiator between Russian and

western brands (western brands are seen as having superior quality). Brand recognition is secondary.

l The appeal of Russian brands depends on the category.

For example, food and skin care are two categories where

Russian brands are considered strong. Conversely, coffee and perfumes are deemed domains for western brands.

l Associations with Russian brands are linked with products exclusively from Russia and Russian heritage. When

asked to name Russian consumer brands, respondents

often mention Rossiya, Krasny Octyabr, Kristall, Rot

Front, VAZ, GAZ, Yava, and Svoboda.

l As trusted quality is the main branding issue for Russians, the strongest potential is seen for those Russian

brands with quality traditions.

l The majority of participants welcome the development

of Russian consumer industries, and expect Russian

brands to become stronger and more competitive in the

future.

l Respondents associate western brands with western heritage, names, culture, and lifestyle.

l Russification of brands is not always necessary; each case

should be considered individually.

l Advertising is considered one of the main means to generate empathy with a western brand. In this sense, the

Russian way can be understood simply as “culturally

relevant” and “nationally correct.” Western ads are appreciated by the Russian audience, if they do not totally

contrast with national values and morals.

Dual Brands

As well as Russian versus western brands, the researchers looked at dual brands, or brands that combine western and

Russian elements such as:

l Russian brands with western image (Wimm-Bill-Dan/J-7);

l Western brands with Russian image (Vodka Rasputin);

l Joint brands: western brands produced in Russia/CIS or

by cooperating with local brands (Tetra Pak plus local

milk and juices);

l Russian brands produced by western companies or with

their participation (Peter I, Sh.O.K).

Again, Russian consumers could not clearly identify certain brands as either western or Russian.

Wholesome Values

In terms of brand attributes, participants were asked to

describe a Russian brand, a western brand, a dual brand, and

themselves along a number of attributes.

Researchers found that the Russian consumer is more

likely to identify with western brands when it comes to attributes such as dynamic, solid, and unique. Wholesomeness

is the attribute associated with Russian brands. Thus,

“Russification” advertising would probably work best if focused on wholesomeness, a quality identified by most respondents. The most effective approach may be to adapt a brand

within Russian culture without changing its identity. This

can be facilitated by promotion and advertising, but the major factor is recognition by Russian consumers and wide usage in a Russian way.

To make a successful Russian ad for a western brand, it

is not enough to duplicate a western advertising idea within

the Russian context—ads should show real Russian people

instead of westernized Russians.

However, participants indicated they like to see original

western ads along with Russian ads for international brands.

Shane Farrell is a partner with F-Squared Market Research

+ Consulting in Moscow, Russia.

For more information on the American Chamber of

Commerce in Russia, telephone +7 (095) 961-2141, email

amcham@amcham.ru, or visit www.amcham.ru.

Reprinted with permission from AmCham News, September-October 1999. Courtesy of the American Chamber of Commerce in Russia.
BISNIS BULLETIN - November 1999

7

AGENCY SPOTLIGHT

REGIONAL CORNER: Saratov Oblast, Russia

U.S. Department of State, Bureau of Educational and

Cultural Affairs—The bureau (formerly part of the U.S. Information Agency) has announced an open competition

(RFP E/PN-00-09) for assistance awards for exchanges and

training programs for the Newly Independent States of Russia, Belarus, Moldova, Ukraine, Armenia, Azerbaijan, Georgia, Kazakhstan, Kyrgyzstan, and Uzbekistan. The bureau

seeks exchange programs that address the following themes:

Women’s Leadership Programs (all countries), Women’s Political Leadership Programs (Russia, Moldova, Ukraine,

Kazakhstan), Professional and Business Associations Programs (Russia, Moldova, Ukraine, Armenia, Azerbaijan,

by Alexander Gordienko

The Saratov oblast is located in the Russia’s Lower Volga

Valley, about 450 miles southeast of Moscow. The region has

a population of 2.7 million, while its capital city, also called

Saratov, has approximately 900,000 residents. In the Soviet

era, Saratov was closed to foreigners because many enterprises of the military-industrial complex were located in the

region. It was opened in 1993. Other large cities in the region include Balakovo (207,000 inhabitants) and Engels

(185,000 inhabitants).

The Saratov oblast is crossed by the Volga river. Saratov

is one of the largest river ports on the Volga. Waterways provide access from Saratov to Moscow, the western Urals, the

Black Sea, the Baltic Coast, and the White Sea.

The oblast also features abundant energy resources. The

Balakovo Nuclear Power Plant and Saratov Hydroelectric

Plant alone produce one-quarter of the power in the Volga

Valley and 3 percent of energy in Russia. Oil and gas are the

most significant natural assets of the region. Average oil output is 1 million MT annually, the bulk of which is processed

in Saratov. The oil/gas and energy generation sectors account

for 37.3 percent of regional industrial output.

Major Companies of Saratov

The Saratov Aircraft Plant manufactures various modifications of YAK-42 aircraft for commercial and training purposes. The Saratov Trolleybus Plant is a major supplier of

trolleybuses in Russia. It also exports them to Europe, Asia,

and Latin America. The Saratov Bearing Plant specializes

in producing a broad line of roller bearings. Litiy-Element

is the only Russian supplier of lithium batteries. Rubber products made by Balakovorezinotekhnika are widely used by

such Russian automakers as VAZ and KAMAZ. The region

is also the largest Russian producer of chemical filaments

and fibers, and local companies produce acrylic acid, methyl

acrylate, phenol, sulphuric acid, and fertilizers.

Foreign Trade and Investment

Saratov oblast’s principal foreign trade partners are the

United States, Great Britain, Italy, Holland, Turkey, and Germany. The region’s main exports consist of electronic devices, electrical equipment, vehicles, crude oil and oil products, mineral fertilizers, and chemicals/petrochemicals. Imports include machinery, medical equipment, nonorganic

chemicals, metals, plastic wares, paper, and food.

During the past three years, the Saratov oblast Duma, in

conjunction with the Regional Government, adopted a number of laws to stimulate and guarantee private investments in

the Saratov region. Under these laws, investors are entitled

to exemptions from local taxes on profits, property, and vehicles for 3 years. Furthermore, they allow land for investment projects to be leased (for up to 49 years) or purchased

by individuals or commercial entities (including foreign ones).

In 1998, over 80 companies with foreign capital were

operating in the Saratov oblast. The majority of them have

German partners, including a joint venture with Bosch that

manufactures automotive spark plugs and a joint venture with

Henkel that produces detergents. Large-scale investment

projects currently under way include the modernization of

the oil-processing company Kreking, involving U.S. and

Spanish companies; a joint venture between the U.S. Grace

corporation and the Kalininsk Rubber Products Plant, and

the construction of a furniture factory in Balakovo with the

French company Seribo. In addition, the Saratov Aircraft

Plant is negotiating with U.S. company Case regarding the

possibility of assembling harvesters in its facility.

Alexander Gordienko is a BISNIS representative in Nizhny

Novgorod, Russia.

For more information on the Volga region, visit BISNIS Online

at www.bisnis.doc.gov/bisnis/country/regions.html#VolgaUrals.

Georgia), Content-Based Internet Training (West NIS,

Caucasus), Distance Learning in the Field of Business Management (Ukraine), Public Library Reform (Ukraine),

Caucasus Regional Cooperation, and more. The bureau is

interested in proposals whose designs take into account the

need for ongoing sharing of information and training.

The deadline for submission of proposals is 5:00 pm, December 22, 1999. For further information, visit http://

e.usia.gov/education/rfps/. To request an application package, contact Thomas Driscoll, program coordinator, tel: (202)

260-6230 or email: tdriscol@usia.gov.
Penalty for Private Use, $300

Sender ________________

U.S. DEPARTMENT OF COMMERCE

International Trade Administration

Washington, D.C. 20230

BISNIS - RRB

OFFICIAL BUSINESS

FIRST-CLASS MAIL

PRE-SORTED

POSTAGE & FEES PAID

ITA/DOC

PERMIT No. G-54

This notice is provided solely as an informational resource and does not constitute U.S. Department of Commerce endorsement of these events. For a more

complete listing of NIS trade events, visit BISNIS Online at www.bisnis.doc.gov/bisnis/leads/tradecal.htm. All information published in the BISNIS Bulletin

regarding trade events is subject to change without notice by the organizers of those events.

IT/Wireless Russia 99

Drinks Russia ‘99 November 23–26, 1999 Moscow

Organized by:

Telephone:

Facsimile:

Email

Website:

ITE Group

+44 (207) 596-5000

+44 (207) 596-5111

press@ite-exhibitions.com

www.ite-exhibitions.com

 Nov. 30–Dec. 2, 1999

Organized by:

Telephone:

Facsimile

Email:

Sectors:

Peter’s Town Exhibitions

+7 (812) 259-4535, 4536

+7 (812) 327-5553

ptexpo@mail.wplus.net

Mobile & satellite communications

Moscow

TRADE EVENTS CALENDAR

Organized by:

Telephone:

Facsimile:

Email:

Website:

EC “Expoforum”

+375 (172) 256-7611

+375 (172) 226-5182

Furniture for bank and office,

computers, information systems

Zdravo-Okhranenie ‘99

9th Intl. Health Care Exhibition

Modern Office & Bank November 23–26, 1999

Organized by:

Telephone:

Facsimile:

Sectors:

Belarus

 Nov. 29–Dec. 3, 1999

ITE Group

+7 (095) 935-7350

+7 (095) 935-7351

healthcare@la.ru

www.iexpocentr.ru

St. Petersburg

Russian Energy Summit

Four Seasons Hotel, London

December 12, 1999

Organized by: Moscow International

Petroleum Club & CWC Associates

 The summit will feature details on:

Ø The status of the sector

Ø Russia on the eve of elections

Ø Restructuring and consolidation in the industry

Ø Latest developments in the legislative and fiscal

environment

Ø Availability of funding and outlook for future

investments

For further information, contact:

Kate McHugh, tel: +44 (171) 704-6161,

fax: +44 (171) 704-8440,

email: bookings@cwconferences.co.uk