2 august 2011
Background material for the August. 2, 2011 Government Presidium meeting (press release)
PRESS RELEASE*
The following issues are scheduled for discussion at the Government Presidium meeting on April 14, 2011:
1. Draft federal law On Introducing Amendments to the Federal Law On Insolvency/Bankruptcy and the Federal Law On Credit Cooperation
The draft has been submitted by the Ministry of Economic Development.
The draft law specifies the clauses of the federal laws On Insolvency/Bankruptcy and On Credit Cooperation concerning the bankruptcy of consumer credit cooperatives as a type of financial organisation.
The amendments to the federal law On Insolvency/Bankruptcy, stipulated by the federal law On Introducing Amendments to the Federal Law on the Organisation of Insurance in the Russian Federation and Certain Legislating Acts, regulate the prevention of financial organisations' bankruptcy and the specifics of their bankruptcy. Credit cooperatives are a special kind of financial organisation. Thus, the draft law proposes to regulate the specifics of their bankruptcy by the Law on Bankruptcy.
Particularly, the draft law proposes to establish additional grounds for the application of credit cooperative bankruptcy prevention measures. These include violations of financial norms established in compliance with credit cooperation legislation, which have been repeated within 12 months since the exposure of the first instance, and the supervising agency's prohibition of fund raising, admissing new members or making loans.
The draft law specifies the definition of the inspecting (supervising) body for credit cooperatives, stipulates additional standards for training the arbitration manager, and envisages the specifics of the appointment and activities of the credit cooperative provisional administration.
The draft law spreads the right of appealing to the arbitration court for an adjudication order to self-regulated organisations of credit cooperatives in relation to their member credit cooperatives. The right will be valid as of the day of finding signs of insolvency of a credit cooperative, if a provisional administration has not been appointed.
Inasmuch as credit cooperatives borrow personal monies from private persons, the draft law stipulates a specific order of priority for meeting the demands of this category of loaners. Particularly, loaners’ applications for their private savings will be satisfied as first priority within 700,000 roubles. Unpaid sums will be recovered by such loaners on the first subpriority of the third priority. Applications for the restitution of equities will be satisfied following settlements with the credit cooperative’s creditors. Such applications by credit cooperative managers will be the last to be satisfied.
The draft law also stipulates the subsidiary responsibilities of credit cooperatives’ managers and self-regulated organisations.
The amendments to the federal law On Credit Cooperation, proposed by the draft law, envisage the regulation of the inspecting body’s duties in the appointment of the provisional administration, application of bankruptcy prevention measures and submission an application to the arbitration court for an adjudication order.
2. Draft federal law On Introducing Amendments to the Penal Code, Articles 76 and 116
The draft has been submitted by the Ministry of Justice.
In compliance with Article 76, Item 1, of the Penal Code, convicts will be transported to the place of imprisonment and transferred to another place of imprisonment under guard, with the exception of persons travelling to the penal settlement independently.
In compliance with Article 12 of the federal law On Institutions and Bodies Executing Criminal Punishment in the F
form of Deprivation of Liberty, convicts will be transported to places of imprisonment on established itineraries with scheduled stops demanding their temporary accommodation in other places of imprisonment. However, the acting legislation does not envisage this procedure.
In this regard, the draft law envisages accommodation for convicts in transit prisons based on the terms of their conviction and in compliance with the legal demand of separation. The draft law stipulates 20 days as the longest term of a convict sojourn in a transit prison to prevent corruption and abuse of convicts’ rights and lawful interests, and with account for established itineraries and schedules.
The draft law stipulates the strengthening of convicts’ liabilities for the disorganisation of the penal institution routine.
Particularly, it proposes to qualify hunger strikes and/or the organisation thereof, and gang self-injury and/or the organisation thereof, as gross offences.
3. Draft federal law On Introducing Amendments to the Federal Law On Mortgage-Backed Securities
The draft has been submitted by the Federal Service for Financial Markets.
The draft law stipulates:
4. Draft federal law On the Ratification of the Agreement between the Government of the Russian Federation and the Government of the Republic of India on Simplifying the Terms of Reciprocal Travels of Certain Categories of Citizens of Both Countries
The draft has been submitted by the Ministry of Foreign Affairs.
The Agreement between the Government of the Russian Federation and the Government of the Republic of India on Simplifying the Terms of Reciprocal Travels of Certain Categories of the Citizens of Both Countries was signed in New Delhi on December 21, 2010.
The Agreement is called upon to strengthen the contractual basis of Russian-Indian relations in their citizens’ reciprocal travels, and to provide optimum conditions for simplifying the terms of such travels for certain categories of citizens, with preference for businesspeople, researchers, cultural activists, students and tourists.
The main item of the Agreement is the simplification of visa issuance for entry, transit, exit and sojourn in the other country for a term not exceeding 90 days within every 180-day period for citizens of the Russian Federation possessing valid foreign passports and for citizens of the Republic of India possessing valid national passports. The Agreement also envisages the possibility of direct application by citizens and organisations for visas and the possibility of issuing multiple visas for a term not exceeding 5 years for citizens of both countries provided certain conditions are met.
5. Signing the Agreement between the Government of the Russian Federation and the Government of Japan on Simplifying the Procedure of Visa Issuance to the Citizens of Both Countries
The Agreement between the Government of the Russian Federation and the Government of Japan on Simplifying the Procedure of Visa Issuance was entered into in an effort to implement the memorandum signed in Tokyo on November 21, 2005.
The Agreement stipulates the simplification of the issuance of single entry visas for a term not exceeding 3 months for entrepreneurs, participants in educational, scientific and cultural activities, mass media personnel and other categories of citizens. In compliance with the Agreement, the said persons shall also be entitled to multiple visas valid within a term not exceeding 90 days within every 180-day period.
The Agreement stipulates the opportunity for issuing multiple visas valid within a term not exceeding 3 years, entitling their holders to unbroken sojourn throughout the term of the visa for the personnel of legal bodies and media outlets active in the host country, and for their spouses and underage children.
The Agreement systematises the amount of visa issuance fees and regulates the time limits for considering visa applications.
The Agreement is liable to ratification in compliance with the federal law On the International Treaties of the Russian Federation, Article 15, Item 1, Paragraph A.
6. On Financial Humanitarian Aid to the Palestinian National Authority
The draft has been submitted by the Ministry of Foreign Affairs.
The PNA applied for a 50% reduction (15.5 million roubles) of the rent fee for the office and living quarters of its embassy to Moscow for a term of 3 years from January 1, 2010 to December 31, 2012.
The Ministry of Foreign Affairs submitted the draft executive order for targeted financial humanitarian aid to the Palestinian National Authority to compensate for 50% of the expenditures connected with the Embassy of Palestine in Moscow renting the office premises and living quarters from January 1, 2010 to December 31, 2012.
7. Signing the Protocol on Introducing Amendments to the Agreement between the Russian Federation and the Grand Duchy of Luxembourg on the Avoidance of Dual Taxation and the Prevention of Income and Property Tax Evasion
The draft has been submitted by the Ministry of Finance.
The draft proposes the signing of the Protocol to the Agreement between the Russian Federation and the Grand Duchy of Luxembourg on the Avoidance of Dual Taxation and the Prevention of Income and Property Tax Evasion, signed in Moscow on June 28, 1993.
In compliance with the recommendations of the Organisation for Economic Cooperation and Development (OECD), the Protocol comprises a revised version of Article 26, “Information Exchanges”, of the Agreement. It aims to enhance the effectiveness of information exchanges between the fiscal agencies of Russia and Luxembourg, including information at the disposal of banks, credit organisations, nominal holders, agents and trustees. Information exchanges will concern any kind of taxes. The procedure of information exchanges between the relevant bodies of the contracting parties is reflected in the Additional Protocol.
In compliance with the contemporary standards of international taxation, Article 4 of the Agreement specifies the term “permanent resident”. Article 5, “Permanent Representation”, is supplemented by provisions allowing the taxation of a major part of incomes from services and activities by dependent agents. Article 10, “Dividends”, establishes the minimum dividend tax rate at 5% instead of 10% to grant Luxembourg competition terms equal to the Netherlands and Cyprus – the largest European investors in the Russian economy. It will also promote the trend of shifting a part of the projects implemented in Russia by major international institutional investors from Cyprus to Luxembourg.
Articles 6, “Property Income”, and 10, “Dividends”, of the Agreement are supplemented by provisions allowing to tax incomes from investment fund shares. Article 13, “Incomes from the Increment of Property Value”, is supplemented by provisions allowing to tax incomes from the alienation of the stock of companies in which immovable property accounts for 50% or more of their capital.
Article 21 of the Agreement, “Other Incomes”, is supplemented by provisions extending opportunities to tax certain kinds of “other incomes”. Article 32, “The Elimination of Dual Taxation”, specifies the procedure for the elimination of dual taxation in Luxembourg.
The Agreement is also supplemented by Article 29, “The Limitation of Preferences”.
In making the draft, the Russian party proceeded from the model agreement on the avoidance of the dual taxation of incomes and property. The contracting parties also proceeded from model agreements recommended by the OECD and the UN.
Following the signing, the Protocol will be liable to ratification in compliance with the federal law On the International Treaties of the Russian Federation, Article 15, Item 1, Paragraph A.
8. Payment of additional membership contribution to the Special Fund of the Northern Dimension Environmental Partnership
The Northern Dimension Environmental Partnership was established in 2001 under the auspices and upon the decision of the Northern Dimension international political forum, which envisages a dialogue between Russia, the EU, Norway and Iceland, for the organisation of funding for and the implementation of environment-oriented infrastructure projects in the Baltic and Barents basins – for the most part, in Russian territory.
One of the basic parts of the Partnership financial mechanism – the so-called Special NDEP Support Fund – was established in 2002 to provide grants for co-funding NDEP projects. The total declared fund contributions amount to 149.2 million euro today.
The Support Fund contribution to be paid by Russia through 2012 amount to 40 million euro. Apart from Russia, the European Commission, with 44 million euro, Sweden, with 26 million euro, and Finland, 16 million euro, are the largest Support Fund investors.
The NDEP portfolio includes 20 Russian-based projects totalling 3,243 million euro being implemented since the Partnership’s establishment. A total of 111 million euro of this sum is funded through NDEP Support Fund grants.
Successfully implemented projects addressing water supply and drainage in several towns in the Leningrad Region and the municipal water supply in Syktyvkar stand out among the Partnership’s achievements.
Projects to improve wastewater discharge in Arkhangelsk, Novgorod, Vologda, Petrozavodsk, Murmansk and Pskov have been endorsed and are at different stages of the operation life cycle. The construction of wastewater treatment facilities in Kaliningrad – one of the Partnership’s top priorities – is underway.
The Partnership plans new fields of activity in addition to municipal water supply and drainage projects. Top priorities include the improvement of wastewater discharge, the introduction of household, industrial and agricultural solid waste recycling, the reduction of air pollution, and increasing energy efficiency.
The sums in the NDEP Support Fund's possession are not sufficient to co-fund all the Partnership projects. It should be taken into consideration that the NDEP Assembly of Contributors unanimously determined in 2009 to prolong the NDEP Support Fund's activities from November 2012 to November 2017, which requires new projects added to the NDEP portfolio.
On December 3, 2010, the Assembly of Contributors decided to initiate another round of replenishing the Support Fund’s finances.
With regard to the above, and as the NDEP's activities mainly concern the implementation of projects which are of priority for Russia (meanwhile Russia’s share presently accounts for 27% of the declared contributions), it is worthwhile to pay just another contribution.
Russia’s optimum extra contribution should amount to 20 million euro, as it is equal to the previous approved contribution and allows Russia to retain its status as the Partnership’s leading member. As Russia's contributions that have been approved as of today will be made before 2012, and the Support Fund will close in 2017, the extra contribution should be made in the period of 2013-2016.
9. Introducing Amendments to the Statute on the Federal Agency for the Development of State Border Infrastructure
The draft has been submitted by the Federal Agency for the Development of State Border Infrastructure.
In conformity with its Statute, the Federal Agency for the Development of State Border Infrastructure will exercise ownership rights in respect to federal property as necessary to maintain checkpoints on the Russian state border.
The functioning of state supervisory bodies on checkpoint premises objectively implies the use of relevant property and the equipment passed to them by the Federal Agency for the Development of State Border Infrastructure for temporary use.
The project envisages granting the agency the right to determine, in coordination with supervisory bodies, the order of using premises and other property and equipment granted to the said bodies at checkpoints on the Russian state border.
The project aims to guarantee the monitoring of checkpoint property safekeeping.
10. Allocating budgetary appropriations to the Government of the Saratov Region from the Government Reserve Fund for the Prevention and Liquidation of Emergencies Situations and the Aftermath of Natural Disasters to conduct relief efforts following the flooding in April and May 2011
11. Issuing state housing certificates to the Government of the Karachayevo-Circassian Republic for the citizens who lost their homes as a result of an emergency situation in the republic on July 27, 2009
Moscow
August 1, 2011
* Press releases by the Department of Press Service and Information are based on the materials submitted by the executive federal bodies for discussion by the Government Presidium meeting.
