PRESS RELEASE *

Background material for the October 5, 2010 meeting

The following issues are scheduled for discussion at the Government Presidium meeting on October 5, 2010.

1. The draft federal law On Introducing Amendments to the Federal Law On the Federal Budget for 2010 and the Planning Period of 2011-2012 .

The draft law has been introduced by the Ministry of Finance.

The draft law is based on the results of the federal budget execution in the first six months of 2010, the prompt information on the federal budget execution from January through August of 2010, and the expected results of Russia’s social and economic development in 2010 and the expected execution of the federal budget in 2010.

The draft law stipulates amendments to the Federal Law On the Federal Budget for 2010 and the Planning Period of 2011-2012 regarding the indicators as approved for 2010, with the indicators for 2011 and 2012 remaining unchanged.

1. The draft law has been developed on the basis of the following indicators of Russia’s social and economic development in 2010:

Index	2009	2010
	Record	Legislative budget	Adjusted forecast
GDP, billions of roubles	39,064	44,957	45,175
GDP growth, percent	-7.9	4.0	4.0
Price for Urals oil blend, U.S. dollars per barrel	61.1	75	75
Consumer price index, December/December	8.8	6-7	7-8
Annual average exchange rate, roubles per U.S. dollar	31.7	30	30.4

The draft law proposes the following key indicators of the federal budget for 2010 taking into account the estimated changes in the expected results of Russia’s social and economic development for 2010:

Index	Legislative budget	Draft law	Change (+/-)
Overall revenues	7,783.8	7,875.0	91.2
percent of GDP	17,3	17,4	0,1
Oil and gas revenues	3,744.3	3,737.1	- 7.2
percent of GDP	8.3	8.3	0.0
Non-oil and gas revenues	4,039.5	4,137.8	98.4
percent of GDP	9.0	9.2	0.2
Expenses	10,212.4	10,256.4	44.0
percent of GDP	22.7	22.7	0.0
Deficit	- 2,428.6	-2,381.4	-47.2
percent of GDP	5.4	5.3	-0.1
Upper limit of Russia’s internal debt by end of year	3,726.7	3,499.2	- 227.5
Upper limit of Russia’s external debt by end of year, U.S. billion dollars (€ billion)	53.0 (41.7)	53.0 (41.7)	0.0

The draft law stipulates increasing overall revenues by 91.2 billion roubles, or 0.1 percent of the GDP, mostly through an increase in oil and gas revenue.

The overall federal budget expenses will increase by 44 billion roubles, with a percent of expenses against the amended GDP remaining unchanged and totaling 22.7 percent.

The federal budget deficit will account for 2.38 trillion roubles, or 5.3 percent of the GDP, which is 47.2 billion roubles, or 0.1 percent less than the figures approved by the Law on Budget and 0.6 percent less than the budget deficit of 2009.

The draft law proposes approving the 2010 federal budget expenses at 10.26 trillion roubles, which is 44 billion roubles more than the amounts approved by the Law on Budget.

The amendments in expenses for the budget classification items are listed as follows:

The draft law proposes increasing budgetary provisions due to the expected savings in budgetary provisions in 2010 in accordance with the amended forecast for Russia’s social and economic development, as well as the savings which have resulted from implementation of the federal budget by the chief controllers of the budgetary funds and due to objective factors and the measures taken to streamline the use of budget finances. These amendments come from the redistribution of budgetary provisions envisaged by the chief controller which, in accordance with Article 217 of the Budget Code and Article 24 of the Law on Budget, cannot be executed by the participants of the budgetary process through introducing amendments into the 2010 federal budget’s overall budget schedule by the decision of the Finance Minister.

This redistribution includes budgetary provision savings of 60.35 billion roubles for managing Russia’s national debt and the budgetary provision savings of 16.45 billion roubles which have resulted from the implementation of the federal budget by the chief controllers of the budgetary funds, as well as measures taken to prompt the efficient use of budget finances.

In accordance with proposals by the chief controllers of the budget, the draft law proposes reducing budget provisions for the following items:

(-) 60.35 billion roubles: reduction in expenses for management of Russia’s national debt through shifting Russia’s loan schedule to the last six months of 2010 and partial transition from quarter coupon payments against government bonds to half-yearly payments, and reducing interest rates;

(-) 22.57 billion roubles: reduction in expenses for other state payments, including those resulting from the lack of decisions related to federal executive bodies  organisational changes;

(-) 1.42 billion roubles: adjustment in the amounts of money in loans from international financial organizations and co-financing funds for international projects;

(-) 5 billion roubles: subventions for recovery of losses incurred by trade organizations through selling new cars with discounts to individuals who scrapped their old cars;

(-) 3 billion roubles: subventions to compensate part of expenses arising from exporting grain and wheat flour due to temporary ban on the export of certain types of grain and flour from Russia;

(-)  2.05 billion roubles: subventions to Russian leasing companies to compensate part of expenses on interest payments on loans received in Russia’s banks in 2008 through 2010 for purchasing domestically manufactured aircraft and leasing them to Russian air companies;

(-) 2 billion roubles: aircraft for the Administrative Directorate of the President;

(-)  1.3 billion roubles: subventions to Russian leasing companies to compensate part of expenses on interest payments on loans received in Russia’s banks in 2009 for up to 5 years for purchasing and leasing domestically manufactured cars;

(-) 900 million roubles: subventions to Russian organizations in agricultural and tractor manufacturing, forestry, oil and gas complex engineering, and the tool-making industry to compensate part of expenses for interest rates on loans received in Russia’s banks in 2009 through 2011 for technical upgrades for up to 5 years;

(-) 898.8 million roubles: Russian state guarantees in foreign currency and in connection of principal’s timely execution of their responsibilities;

(-) 791.3 million roubles: adjustment in the amounts of loan money from international financial organizations and co-financing funds for international projects;

(-) 520 million roubles: subventions to subsidiaries and affiliated companies of United Aircraft Engineering Corporation to compensate part interest payments on loans granted from Russian banks in 2008 through 2010 for technical upgrades for up to 5 years, as well as part of expenses on lease payments for technological equipment supplied by Russian leasing companies under lease agreements beginning in 2006;

(-) 259.2 million roubles: compensation for losses in railway transport revenue from discounted tariffs for students ages 10 and older on all categories of long-distance trains;

(-) 200 million roubles: subventions to Russian aircraft engine manufacturers to compensate part of interest payments on loans granted from Russian banks in 2008 through 2010 for technical upgrades for up to 5 years, as well as part of expenses on lease payments for technological equipment supplied by Russian leasing companies under lease agreements beginning in 2006;

(-) 3.74 billion roubles: pension payments to military personnel and their family members, as well as individuals of equal status according to the pension provisions for the planned amount due to lack of proper housing, a decrease in public prosecution employees retiring on pension with years of service, and due to public prosecution staff turnover in Russia’s public prosecution system and a decrease in actual expenses per pensioner as compared to the current year’s estimated expenses.

The draft law proposes increasing budgetary provisions, including the following items:

(+) 12 billion roubles: operation and maintenance of the Russian Defence Ministry’s infrastructure facilities;

(+) 640 million roubles: subventions to public enterprises in the military industrial complex to cover expenses on implementing orders to deliver goods, projects and services for federal state requirements;

(+) 2.03 billion roubles:  reimbursement of the Emergencies Ministry’s expenses on battling wildfires in the regions;

(+) 1.9 billion roubles:  implementation of the Government’s tasks of providing bonus payments to military employees and those of equal status, civil servants, federal executive body employees and the state institutions under their jurisdiction which engaged in battling the massive wildfires in the regions;

(+) 20 billion roubles: asset contribution to Russian Railways capital to create transport infrastructure facilities for the XXII Olympic Winter Games and XI Paralympic Winter Games of 2014 in Sochi;

(+) 20 billion roubles: contribution to the Russian Railways capital for railroad reconstruction and modernization;

(+) 10.92 billion roubles: contribution to the capital of the Special Economic Zones company to establish a special port economic zones in Ulyanovsk Region and Khabarovsk Territory, and a special industrial-manufacturing zone in the Samara Region;

(+) 5.5 billion roubles: establishment of Skolkovo industrial complex;

(+) 3 billion roubles: contribution to the capital of the United Grain Company to modernize agro-industrial market infrastructure;

(+) 1.7 billion roubles: contribution to the capital of the Holding MRSK for construction of the Raspadskaya mine’s external power supply facilities;

(+) 1.5 billion roubles:  contribution to the capital of RusHydro for a facility reconstruction of the Baksan hydroelectric power station;

(+) 25 billion roubles: additional asset contribution to the Housing and Utilities Reform
Fund state corporation to provide additional financial support to Russia’s entities for residents’ relocation from substandard and hazardous housing for a total area of at least 3.2  million square metres until December 31, 2012.

(+) 215 million roubles: satisfaction of accounts payable on battling wildfires (payments for specialized equipment and firefighting plans) due to the emergency situation and the wildfires in Russia’s specially protected natural areas, and for additional prevention projects;

(+) 500 million roubles: maintenance work at the Far Eastern Federal University;

(+) 193.6 million roubles: events to mark the Year of Teacher in Russia;

(+) 300 million roubles: reconstruction of State Russian Museum’s Summer Garden in St Petersburg;

(+) 13.72 billion roubles: granting subventions to the Rostekhnologii state corporation as asset contributions to complete federal centers of medical technology, as well as for a financial audit and evaluation of incomplete construction facilities;

(+) 1.09 billion roubles: measures to provide social support for citizens affected by radiation after radiation related accidents and nuclear tests due to the indexation of compensation and other payments in 2010 under the Resolution of the Russian Government of December 16, 2009 # 1024, and the increase in the number of these disabled and disability recertified;

(+) 16 billion roubles: allocations to provide measures for securing balanced budgets, including the additional support of 5 billion roubles for  regions affected by the drought;

(+) 2 billion roubles: subventions to the budget of the Republic of Tatarstan for road construction and repair as part of preparations for the XXVII World Summer Student Games in Kazan;

(+) 2.9 billion roubles: providing the disabled with rehabilitation equipment, including manufacturing and repair of prosthetic and orthopaedic appliances;

(+) 1.22 billion roubles: compensation for part of agricultural goods manufacturers’ expenses on purchasing mineral fertilizers due to unfavorable conditions in 2009 through 2010 and aiming to support and level the volumes of agricultural goods to be produced at 2011;

(+) 549.4 million roubles: repairs and capital repairs of the public transport and traffic routes in Petropavlovsk-Kamchatsky, Kamchatka Territory.

2. The draft federal law On Introducing Amendments to the Federal Law on Technical Regulation.

The draft law has been introduced by the Ministry of Industry and Trade.

The draft law aims to secure the policy of the united technical regulation system under the Federal Law on Technical Regulation, stimulate integration processes to bring together the Customs Union members’ legislation systems within the Eurasian Economic Community and with the European Union in accreditation and compliance confirmation (assessment), reduce technical barriers for launch of newly manufactured products subject to mandatory compliance confirmation, to simplify procedures of assessing products’ conformity with technical regulation requirements, establish a national accreditation body, secure Russia’s participation in foreign accreditation organizations such as IAF and ILAC, and provide conditions for international recognition of Russia’s accreditation system.

The draft law stipulates the following amendments to the Federal Law on Technical Regulation:

1. Application of European principles of the ‘new approach’ in technical regulations which implies establishing generic requirements for product safety and design and related processes of design and development (including research studies), manufacturing, construction, assembling, arrangement, storage, transportation, sale and disposal (hereafter referred to as processes), and setting specific requirements and procedures for conformity assessment procedures in the standards (Item 4, sub-item “d”).

2. Application of the European principles of ‘modular approach’ for procedures of assessing goods compliance to established mandatory requirements. The draft law stipulates that the list of typical modules for the obligatory conformity assessment with recommendations for their use is approved by the Russian Government (Item 12).

3. Establishing a united national system for accreditation based on international and European principles and approaches. The draft law stipulates that the national accreditation body shall be set up in accordance with the procedure established by the Russian President (Item 18).

4. Granting a federal executive body authorized by the Russian Government with the right to set criteria (requirements) for accreditation of certification authorities and testing laboratories (centres) relying on international standards (Item 17, sub-item “c”).

5. Securing new principles for technical regulation (Item 3, sub-item “d”.

6. Deleting accreditation from conformity assessment as one of its type. This approach results from the necessity to harmonize technical regulations with international experience of accreditation and conformity assessment results (Item 4, sub-item “c”).

7. Application of temporary standards and organizations’ standards for goods’ compliance confirmation, including innovation products. The draft law stipulates introducing a new document on standardization entitled “provisional national standards” (Item 10). In addition, the draft law introduces a monitoring procedure for application of the “provisional national standard” for a national standards body to render decisions on approving it as a national standard or on cancelling it upon its expiration (Article 16.2).

8. The draft law stipulates that technical regulations shall be applied equally and in equal measure regardless of the type of regulatory legal act that approves them, such as federal law, the Russian President’s decree, resolution of the Russian Government or a regulatory legal act of a federal executive body (Item 4, sub-item “e”).

9. The draft law stipulates the right of an applicant to apply to a certification body with a request to assess the goods’ compliance with technical regulations and pass the declaration of conformity on the basis of gained results in case the applicant does not use assessment conformity documents for standardization (Item 13, sub-item “d”). In addition, according to the draft law, the applicant has the right to use their technical documentation to confirm the goods compliance with technical regulation requirements (Item 16, sub-item “a”). The draft law also specifies technical documentation that determines the goods’ compliance with requirements of corresponding technical regulations (Item 13, sub-item “a”).

10. The draft law excludes requirements for mandatory conformity assessment of goods which is not subject to technical regulations and not included on the unified list of goods subject to mandatory certification and on the unified list of goods subject to a declaration of conformity (Item 24, Sub-item “a”).

11. The draft law implies transition to a notifying (declarative) order of submitting declaration of conformity, with the opportunity to submit it online.

12. The draft law stipulates that veterinary, sanitary and phytosanitary measures shall be taken in accordance with the federal laws On Sanitary and Epidemiological Welfare, On Food Safety and Quality, On Phytosanitary Control, and the Russian Federation’s law On Animal Health before adopting technical requirements for certain types of goods (Item 24, Sub-item “b”).

13. The draft law stipulates expansion of the list of expenses financed by the federal budget. Such expenses include implementing expert analysis of projects for international and regional standards (Item 22, sub-item “a”), developing international and regional standards, as well as paying fees to international accreditation organizations (Item 23, sub-item “b”). The introduction of such requirement results from the necessity to complete the work on specifying and updating regional and international standards until January 1, 2012 to establish unified requirements for goods and equal research and testing methods for solving tasks related to securing standards for technical regulations developed by Eurasian Economic Community and Customs Union. The task will require an additional 350 million roubles to be allocated from the federal budget.

14. The draft law specifies implementation of the federal law On Technical Regulation (Item 1, sub-item “c”).

15. The draft law introduces new terms, including: “accreditation certificate,” “accreditation expert,” “technical expert,” “accreditation scope,” “conformity assessment scope,” “type approval,” and updates or specifies terms already in use for the federal law On Technical Regulation, including ‘technical regulation,” “control (supervision) over implementation of technical regulations requirements,” “technical regulation” and “testing laboratory (centre)” (Item 2).

Adopting the draft law aims to further improvement of Russia’s legislation in technical regulation. The draft law will also provide for less expenditure incurred by goods manufacturers (companies acting as foreign manufacturers) while releasing goods into circulation. Adoption of the draft law will not render other federal laws invalid; neither will it require suspension, alteration or adoption of any other law. Nonetheless, adoption of the draft law will require introducing amendments to six regulatory legal acts of the Russian Federation. 

3. The draft federal law On Introducing Amendments to the Administrative Offences Code of the Russian Federation (the chapter of responsibility for violations of technical regulations).

The draft law has been introduced by the Ministry of Industry and Trade.

The applicable Chapter 19 of the Administrative Offences Code of the Russian Federation stipulates administrative responsibility for violating technical regulation requirements, state standards mandatory requirements, rules of obligatory  certification, as well as for violating regulatory document requirements for providing uniformity of measurements.

The penalty amounts fixed by Article 19.19 of the Administrative Offences Code of the Russian Federation fail to correspond to the risks of inflicting injury or posing threats to citizens’ life, damage to private property or that of legal entities, or damage to state or municipal property, the environment, or the life and health of animals or plants.

With the establishment of the Customs Union between Russia, Kazakhstan and Belarus, the system of technical regulation is undergoing improvements. Among the measures adopted is the general transition from obligatory certification to a declaration of conformity executed on the basis of analyzing harm infliction risk, the extent of goods distribution and its design complexity or simplicity, as well as consumer usability. This transition corresponds to the European Union’s best policies, with a joint liability (during cerification) for release of goods not meeting technical regulations transferred to the manufacturer during declaration. However, the Administrative Offences Code of the Russian Federation does not envisage the manufacturer’s administrative responsibility for inadequate declaration of goods conformity, including those distributed for the first time.

Likewise, the Code does not include cases that stipulate responsibility for violating obligatory requirements for goods subject to mandatory compliance confirmation or related to processes of design and development (including research studies), manufacturing, construction, assembling, arrangement, storage, transportation, sale and disposal as stipulated by Russia’s regulatory legal acts, regulatory documents of federal executive bodies applied before commencement of technical regulations aiming at goods’ mandatory compliance confirmation, as well as responsibility for the release of goods which fail to correspond to these requirements.

The draft law proposes the following measures to eliminate the aforementioned gaps in the legal regulation:

- combining standards of administrative responsibility for violating technical regulations in several articles of the Administrative Offences Code of the Russian Federation, namely articles 14.39 through 14.40, while excluding such standards from other articles to provide a unified law enforcement practice;

- combining standards of administrative responsibility for violating regulations of ensuring the uniformity of measurements  in one article;

- establishing administrative responsibility for violating obligatory requirements concerning goods (works and services) and related processes and objects, with their regulative standards as stipulated in Article 5 of the Federal Law on Technical Regulation;

- increasing administrative fines for technical regulation violations, a maximum fine of 5,000 roubles for individuals, a maximum fine of 50,000 roubles for self-employed entrepreneurs and officials and  a maximum fine of one million roubles for legal entities;

- establishing the stipulation that an administrative offence report is drawn up by an official from an authorized body of state control over the implementation of obligatory requirements for goods and related processes specified in the technical regulations, while the decision of imposing administrative fines is carried out solely by a trial court of general jurisdiction (commercial court). This approach results from the necessity to provide diverse and objective enforcement of administrative violation cases with market participants’ increased responsibility for release of goods which do not meet established requirements;

- increasing sanctions for certain cases included in the Administrative Offences Code of the Russian Federation for repeated acts and omissions, the confiscation of administrative violations items (articles 14.4 and 14.39), and the disqualification of officials at certification bodies and testing laboratories (centres) for up to 3 years (Article 14.40, Part 3);

- specifying judges’ authority to consider administrative violation cases (article 23.1) and authority of bodies which execute state control (supervision) over the implementation of technical regulation requirements and officials authorized to draw up administrative offence reports (Article 28.3);

- delimitating responsibility of market traders,  in distinction from the most recent edition of article 19.19 of the Administrative Offences Code of the Russian Federation,  for the following:

• violation of technical regulations, requirements for goods subject to mandatory compliance confirmation or for related processes established in accordance with article 36 of the Federal Law On Technical Regulation and applied until technical regulations for mandatory assessment of goods’ conformity come into force;

• release of goods not conforming with specified requirements;

• labeling goods with a market distribution mark (conformity sign mark) while its conformity is not proved by technical regulations requirements (regulatory legal  legal acts or regulatory documents);

• violating rules of certification work, as well as issuing certificate of conformity or accepting declaration of conformity with violation of requirements of technical regulation laws (Article 14.40, Part 3);

• violating legislative requirements for ensuring uniformity of measurements (Article 19.19).

In addition, the draft law proposes updating administrative objects of offence (Article 14.4) related to securing state interests in accordance with the Consumer Protection Law, the Federal Law On Food Safety and Quality and other legislative and sub-legislative acts.

4. The draft federal law On Introducing Amendments to Individual Legislative Acts of the Russian Federation to Eliminate Contradiction and Avoid Duplication in the Law of the Russian Federation due to Implementation of the Federal Law on Technical Regulation.

The draft law has been introduced by the Ministry of Industry and Trade.

The draft law has been developed due to certain legislative acts of the Law of the Russian Federation containing discrepancies and duplications with norms of the Law of the Russian Federation on technical regulation, and with existing obligations of the Russian Federation in technical regulation adopted by the Customs Union as part of establishing a common economic space. 

The draft law stipulates amendments to 19 legislative acts of the Russian Federation, including the Federal Law No. 116-FZ On Industrial Safety of Hazardous Production Facilities of July 21, 1997, the Federal Law No. 52-FZ On Sanitary and Epidemiologic Welfare of the Population of March 30, 1999, the Federal Law No. 29-FZ On Food Quality and Safety of January 2, 2000, the Federal Law No. 17-FZ On Railway Transport of the Russian federation of January 10, 2003, the Federal Law No. 38-FZ On Advertising of March 13, 2006, the Federal Law no. 69-FZ On Gas Supply in the Russian Federation of March 31, 1999, and the Federal Law No. 150-FZ on Weapons of December 13, 1999.

The draft law envisages introducing the following major amendments:

- bringing the Law of the Russian Federation into compliance with the Law and technical regulations in the section regulating safety of technical regulation objects, conformity assessment (including state control (supervision), over issuing agreements, permits and estimates following mandatory requirements tests;

- bringing terms used in individual legislative acts of the Russian Federation into accordance with the Law, including in the sphere of compliance confirmation and documents’ labeling related to stadardization;

- regulating application of sanitary standards and rules until technical regulations enter into force, and eliminating the requirement to obtain the sanitary and epidemiological inspection reports on goods in accordance with technical regulation obligations of the Russian Federation within the Customs Union and establishing a common economic space between Russia, Belarus and Kazakhstan;

- delimitating authorities for control and supervision in the section for prevention of simultaneous assignment of equal authority to two or more bodies;

- introducing into the Law of the Russian Federation, concerning goods’ compliance assessment  and related processes, a rule of references to technical regulation laws;

- excluding certification functions from authorities of federal executive bodies;

- delimitating scopes of regulation of the Law and other legislative acts of the Russian Federation.

5. The draft federal law On Ratification of Protocol on Introducing Amendments to the Customs Union’s Agreement on Veterinary and Sanitary Measures of December 11, 2009.

The draft laws on ratification of protocol on introducing amendments to the Customs Union’s agreement on veterinary and sanitary measures of December 11, 2009 and the Russian Government’s resolution on introducing Protocol on Introducing Amendments to the Customs Union’s Agreement on Veterinary and Sanitary Measures for ratification of December 11, 2009 have been introduced by the Ministry of Agriculture and the Ministry of Foreign Affairs.

Resolution # 39 taken by the Interstate Council of the Eurasian Economic Community on May 21, 2010 stipulates the necessity to implement interstate procedures by October 15, 2010, to put into effect the Protocol of Introducing Amendments to the Customs Union’s Agreement on Veterinary and Sanitary Measures of December 11, 2009 in order to provide conditions for establishing an improved system for controlling, supervisory and licensing functions on the Customs union’s single customs territory by the governments of Belarus, Kazakhstan and Russia starting from January 1, 2011.

The draft federal law proposes ratification of the protocol signed by authorized representatives of Russia, Belarus and Kazakhstan.

Introduction of the amendments stipulated by the protocol aims at improving veterinary legal regulation and establishing a unified legal base for the Customs Union’s member states, namely:

• specifying an object for joint examinations (inspections) carried out by the Customs Union’s authorized bodies, more specifically the organizations and individuals that manufacture, process and/or store controllable goods imported to the Customs Union’s customs territory and transported from the territory of one country to the territory of the other country;

• specifying the process for issuing veterinary certificates by those other than the Customs Union’s authorized bodies, e.g., by accredited organizations.

The aforementioned amendments have been developed with consideration for measures to optimize control and supervisory (licensing) functions envisaged by the Russian Federation. The amendments stipulated by the protocol will allow increased trade turnover through the Customs Union member states’ simultaneous implementation of international obligations in providing veterinary and sanitary welfare on the Customs Union’s costoms territory.

The draft decree stipulates approval of the protocol and introduction of the draft law On Ratification of Protocol on Introducing Amendments to the Customs Union’s Agreement on Veterinary and Sanitary Measures of December 11, 2009 to the State Duma, and appointing Alexander Petrikov, state secretary and Deputy Agriculture Minister, the official representative of the Russian Government for considering the issue of ratification of the protocol by the Russian Federal Assembly’s upper and lower houses.

6. The draft federal law On Ratification of Protocol on Introducing Amendments to the Customs Union’s Agreement on Plant Quarantine of December 11, 2009.

The draft federal law has been introduced by the Russian Ministry of Foreign Affairs and Ministry of Agriculture.

Resolution # 39 taken by the Interstate Council of the Eurasian Economic Community on May 21, 2010 stipulates the necessity to implement interstate procedures by October 15, 2010 to put into effect the Protocol of Introducing Amendments to the Customs Union’s Agreement on Plant Quarantine of December 11, 2009 in order to provide conditions for establishing an improved system for controlling, supervising and licensing functions on the Customs union’s single customs territory by the governments of Belarus, Kazakhstan and Russia starting from January 1, 2011.

The draft federal law proposes ratification of the protocol signed at St. Petersburg on May 21, 2010.

The aforementioned protocol has introduced amendments to the Customs Union’s Agreement on Plant Quarantine of December 11, 2009, which imply the following:

• narrowing the agreement’s scope of action and territory of validity for goods subject to quarantine and phytosanitary control (supervision) at the Customs Union’s customs border solely during import and on the Customs Union’s customs territory. During export of the quarantined goods from the Customs Union’s customs territory, the control (supervision) is implemented in accordance with international obligations and the Union member states’ laws;

• substitution of the system of import quarantine allowance during the import of quarantined goods to the Customs Union’s customs territory for the system of public notice of specified phytosanitary requirements for quarantine goods;

• narrowing the range of quarantined goods subject to certification, by certifying solely quarantined goods classified as those with high phytosanitary risk in accordance with the quarantined goods list subject to phytosanitary control (supervision) at the Customs Union’s customs border and on the Union’s customs territory.

The regulations stipulated by the protocol are not listed in the Law of the Russian Federation, which requires introducing amendments to the Law on Plant Quarantine in the part of implementation of quarantine and phytosanitary control (supervision) stipulating public notice of specified phytosanitary requirements for quarantine goods taking into account the phytosanitary degree of risk, issuing export or re-export phytosanitary certificates for batches of quarantined goods classified as those with high phytosanitary risk.

The protocol is subject to ratification under Item 1, sub-item “a”of Article 15 of the Federal Law on International Agreements.

7. The draft federal law On Ratification of the Agreement between the Governments of the Russian Federation and Japan on Cooperation in Peaceful Use of Nuclear Energy.

The draft federal law has been introduced by the Russian Ministry of Foreign Affairs and Rosatom State Corporation.

The agreement between the governments of the Russian Federation and Japan on cooperation in the peaceful use of nuclear energy was signed in Tokyo on May 12, 2009.

The agreement was developed with consideration for the international obligations of the Russian Federation and has a purposive character, aiming to provide opportunities for launching and implementing large-scale economic projects in nuclear energy under the two countries’ international obligations, including those to the International Atomic Energy Agency.

In this regard, the countries intend to cooperate in natural uranium deliveries and services in enrichment, and reprocessing spent nuclear fuel.

The agreement is subject to ratification under Item 1, sub-item “a” of Article 15 of the Federal Law on International Agreements of the Russian Federation.

The draft law stipulates ratification of the aforementioned agreement.

8. The draft federal law On Ratification of the Agreement on Strategic Partnership between the Russian Federation and the Arab Republic of Egypt.

The draft federal law has been introduced by the Russian Foreign Ministry.

The agreement between the Russian Federation and Egypt on strategic partnership was signed by the presidents of the two countries in Cairo on June 23, 2009.

The agreement aims to strengthen the negotiating and legal base for long-term development of interstate relations between the Russian Federation and the Arab Republic of Egypt and consolidate the improved level of the Russian-Egyptian strategic partnership.

The agreement emphasize the two countries’ commitment to a policy of establishing a new, multipolar, safer and a more just world order, as well as adhering to the United Nations Charter provisions and other generally recognized principles and rules of international law. The agreement establishes mechanisms for the regular coordination of the two countries’ foreign policies and steps  that seek a comprehensive peace in the Middle East. In addition, the agreement stipulates the opportunity for holding consultations on politico-military aspects of international events and national security issues.

The agreement is subject to ratification under Item 1, sub-item “d” of Article 15 of the Federal Law on International Agreements of the Russian Federation.

9. The draft federal law On Ratification of the Agreement between the Governments of the Russian Federation and South Ossetia on Promotion and Mutual Protection of Investment.

The draft federal law has been introduced by the Russian Ministry of Foreign Affairs and the Ministry of Economic Development.

The draft federal law stipulates ratification of the agreement signed in Tskhinvali on June 24, 2009.

According to the Russian Ministry of Foreign Affairs and the Ministry of Economic Development, the agreement implementation will make for a long-term, stable and predictive legal environment, and will trigger investment, trade and economic partnership between the Russian Federation and South Ossetia.

The draft federal law envisages that each contracting party shall provide vested capital in the other party’s state investors with conditions as favorable as those offered to the vested capital of its own investors and investors of any third state. Each party reserves the right to apply and introduce exemptions to the other contracting party’s investments and revenues from national regimes in accordance with its law.

None of the contracting parties is obliged to extend over investors of the state of the other contracting party the preferences it offers to investors of any third state on the basis of agreements related to tax issues and in relation with its participation in free trade zones, customs or monetary unions, common markets and other similar economic and integration formations.

The agreement secures the investment and revenue of the investors from compulsory exemption such as nationalization, expropriation or other measures that have similar consequences excluding cases when such measures are implemented for the public benefit to secure order established by the laws of the contracting parties. The agreement specifies mechanisms for securing investment and reimbursement for damages, and stipulates remedial measures for investors and procedures for settlement of investment disputes, including international arbitration. The agreement guarantees unimpeded transfer of revenues and other payments in connection with investment implementation following an investors’ fulfillment of all tax liabilities.

In addition, it is stipulated that the agreement shall be applied to all capital investment implemented from January 1, 1992. The specified date results from the Russian Federation’s emergence in the global arena as an international entity. Contemporaneously, the specified date excludes risks related to, particularly, possible lawsuits against Russia as a previous member state of the USSR, for instance, in the part of compensation for expropriation (without proper compensation) for property on the territories of the former USSR member states.

The agreement is subject to ratification under Article 15 of the Federal Law on International Agreements of the Russian Federation.

The draft federal law corresponds to standards of international law and does not contradict the international obligations of the Russian Federation.

10. The Agreement between the Governments of the Russian Federation and the Republic of Nicaragua on Promotion and Mutual Protection of Investments.

The draft executive order has been introduced by the Russian Ministry of Economic Development.

Signing the agreement will lead to a long-term, stable and predictable legal environment for Russian and Nicaraguan investors, and will trigger investment, trade and economic partnership between the two countries.

The draft agreement envisages providing investors with the most-favoured-nation status, with admittance of investments on the territory of the state specified in the agreement and that is implemented in accordance with its law, while the other party’s state investors will be provided with conditions as favorable as those offered to the vested capital of its own investors and investors of any third state. Each party reserves the right to apply and introduce an exemption of the other contracting party’s investments and revenues from national regimes in accordance with its law.

The draft agreement stipulates securing capital investment and revenue from compulsory exemption such as nationalization, expropriation or other measures that have similar consequences, excluding cases when such measures are implemented for the public benefit to secure order as established by the laws of the contracting parties. The document specifies mechanisms for securing investments and reimbursement for damages, and stipulates remedial measures for investors and procedures for settlement of investment disputes, including international arbitration. The document guarantees unimpeded transfer of revenue and other payments in connection with investment implementation following an investors’ fulfillment of all tax liabilities.

The draft agreement has been developed on the basis of a standard agreement on the promotion and the mutual securing of investments approved by the Resolution of the Russian Federation 2001 No.456 of June 9, 2001.

The aforementioned agreement is subject to ratification under Article 15 of the Federal Law on International Agreements of the Russian Federation.

11. Establishment of the organizing committee for celebrations marking Pyotr Stolypin’s 150th birthday.

The draft executive order has been introduced by the Russian Ministry of Economic Development.

The draft executive order stipulates the decision on establishing the organizing committee for celebrations marking Pyotr Stolypin’s 150th birthday under the chairmanship of Prime Minister Vladimir Putin, and stipulates charging the committee with the task of developing and approving the corresponding plan for major celebratory events to mark Stolypin’s 150th birthday.

The document proposes that the committee include representatives from the ministries of Economic Development and Trade, the Ministries of Culture, Interior, Foreign Affairs, Communications and Mass Media, Agriculture, Health and Social Development, Defence, Industry and Trade, Regional Development, Education and Science, Finance, the Federal Archive Agency, Federal Migration Service, as well as representatives from the State Duma, Russia’s Public Chamber, Russian entities’ executive bodies and the Russian Academy of Sciences and other interested organizations.

12. Introducing amendments to Resolution of the Russian Government No. 400 of July 30, 2004.

The draft resolution has been introduced by the Ministry of Natural Resources.

The draft resolution stipulates amendments to the Decree of the Russian Government No. 400 of July 30, 2004 On Approving the Statute on Federal Agency for Supervision of Natural Resource Management and Introducing Amendments to the Resolution of the Russian Federation No. 370 of June 22, 2004 in order to determine a government body authorized to issue decisions on goods destruction, its method and location for further placing such goods for a customs procedure of goods destruction.

Item 2 of the draft resolution stipulates the order from the Ministry of Natural Resources to develop and approve within a two-month period the form and order of issuing decisions in the specified scope of activity on options of goods destruction, the method and location for further placing such goods for a customs procedure of goods destruction.

13. Submitting the Agreement between the Russian Federation and the Republic of Belarus on Developing Military and Technical Cooperation to the Russian president for his signature.

The draft resolution has been introduced by the Russian Ministry of Foreign Affairs and the Ministry of Defence.

The draft resolution proposes approving the agreement signed in Moscow on December 10, 2009 and submitting it to the Russian President for introduction to the State Duma for ratification.

The draft federal law proposes ratification of the agreement.

In accordance with Article 16, the agreement enters into force from the date of receiving the latest written notice of implementation by the parties domestic procedures necessary to put the agreement into force.

The subject of the agreement is the order of the parties’ implementation of deliveries of military goods for national armed forces, military units, law enforcement bodies and special services.

Under the agreement, deliveries of military goods shall be performed in accordance with contracts signed with the parties’ authorized organizations, without issuing licenses for the import and export of military goods.

Under the agreement, military goods include weapons, military equipment, , services and results of intellectual activity, including exclusive rights for intellectual property, information in the military technical sphere and any other products, works or services classified as military products in accordance with any party’s law.

The responsibility for coordinating all issues related to military product’s range, volumes, conditions and terms of supply activities shall be imposed on the Parties’ authorized bodies.

In accordance with Article 5 of the Federal Law on Military and Technical Cooperation of the Russian Federation with Foreign Countries, licensing for the import and export of military goods shall be the basic method of government control and implementation for state monopolies in military and technical cooperation.

The agreement is subject to ratification under Item 1, sub-item “a” of the Article 15 of the Federal Law on International Agreements of the Russian Federation.

Moscow,

October 4, 2010

* Press releases by the Department of Press Service and Information contain the materials submitted by the executive federal bodies for discussion by the Presidium of the Government of the Russian Federation.