Transcript of the beginning of the meeting:

Vladimir Putin: Good afternoon, colleagues. Let’s start with an update.

The reconstruction of the Sayano-Shushenskaya hydroelectric power station continues. One of the project’s key stages – the spillway – has just been completed. It will be only crucial during the high water season in spring, yet it has already been launched. Igor Sechin has been there. Please, tell us about it in more detail.

Igor Sechin: Acting upon your instructions, I attended the opening ceremony of the spillway at the Sayano-Shushenskaya station jointly with representatives of RusHydro and the Energy Ministry. Our task concerned ensuring the station’s operation in Khakassia. All of the elements of the spillway were accepted, including the gates regulating the rate of the flow, two 1.1-kilometre tunnels drilled through the mountain (diameter 10 to 12 metres) and sluiceway entrances. In short, all of the elements of the spillway were accepted yesterday and a corresponding acceptance act was signed. The Federal Service for Supervision of Environment, Technology and Nuclear Management checked everything.

What does the launching of the spillway mean for the station’s personnel and the residents of Cheryomushki? They no longer have to fear that the water will rise so high as to damage the power station and the settlements located in the lower reaches.

Vladimir Putin: How long has it taken?

Igor Sechin: Mr Putin, you took the decision to build the spillway on the day you visited the power station after the accident. It had not been built during the Soviet era, although it was stipulated in the power station’s design.

Vladimir Putin: So, it was initially stipulated, but not built?

Igor Sechin: Yes, it was stipulated but not built. We have completed this project in record time – two years.

Vladimir Putin: So, it took you only two years?

Igor Sechin: Yes, two years.

Vladimir Putin: And how much did it cost? What’s the final figure?

Igor Sechin: Mr Putin, it is an expensive project, but we had to do it. The most expensive part was the drilling of the tunnels.

Vladimir Putin: I know it was expensive, but still, how much?

Igor Sechin: If you allow, I will report on the final figures a bit later because the calculations have not been finished yet. We have only completed the technical part of the project.

Vladimir Putin: Okay. Next time, it would be preferable if you calculated everything first and then went about the work, instead of the other way round. Calculate everything: the volume, the time, the number of hours, the amount of concrete and all other expenses. Analyze all this and report back to me.

Igor Sechin: I will. In total, 1,500 people were involved in the construction of the spillway, as well as 200 machines.

Vladimir Putin: Check it all, analyze it and report to me. We need to know exactly how much things cost in this region.

Igor Sechin: We absolutely will.

Vladimir Putin: Good.

Igor Sechin: We will make an additional inspection into this issue.

Vladimir Putin: Then it's settled. Good, thank you. Thank you and everyone who worked there. This represents an important stage in the restoration of the Sayano-Shushenskaya hydroelectric power station, as well as the entire cascade.

Igor Sechin: In December, we will put the next hydroelectric unit on stream.

Vladimir Putin: Which one will that be? The sixth?

Igor Sechin: At present, four units have been restored and are functioning. The fifth will be ready in December and the sixth in February. In May, we will deliver the remaining four units.

Vladimir Putin: We looked at a unit being assembled at the plant in St Petersburg. Which one was it?

Igor Sechin: Mr Putin, at Power Machines you checked to see how these hydraulic units were manufactured. The first batch was dispatched from the plant last summer. It arrived at the site, and together with the governor, we checked their shipment infrastructure along the Northern Sea Route and then by road.

Vladimir Putin: Have they completed the road there? A road and a bridge needed to be completed there.

Igor Sechin: Everything has been done, Mr Putin. If I may, I would like to commend the regional administrations: they displayed a great deal of responsibility and provided much assistance.

Vladimir Putin: Very good. Send my warm greetings to Mr Zimin (Viktor Zimin, head of the government of the Republic of Khakassia). Well done.

Igor Sechin: Okay.

Vladimir Putin: Thank you.

Igor Sechin: Mr Putin, we plan to send the remaining four hydraulic units produced by Power Machines to the station in May.

Vladimir Putin: Good. Thank you. Mr Trutnev (addressing the Minister of Natural Resources and Environment Protection), how is the work progressing on the adoption of legislation concerning increasing fines for air and water pollution and other environmental violations? How is work progressing on our transition over to the principles of the best and most environment-friendly technology available? This is a very sensitive issue, one that is of the utmost importance for the industry and for the economy in general. We agreed that we would work in close contact not only with environmental organisations, but also with the business community. This is important because we must resolve issues of environmental protection on a more modern level, but we cannot make decisions that would negatively impact the competitiveness of our economy. How is the work on this legislation progressing in parliament?

Yury Trutnev: Mr Putin, of the six draft laws that were submitted relating to the environment, five passed their first reading to date.

Vladimir Putin: Five out of six?

Yury Trutnev: Yes. Of the six draft laws that make up a package that embraces all forms of interaction of people and companies with the environment, five have passed the first reading, and one is being finalised by the committee. As for those that have been passed, it is significant that the two most difficult ones, which were passed on October 7, have to do with standard setting and economic incentives and – as you mentioned – with shifting to the best available technology (BAT) and waste recycling. The law on BAT, despite the fact that it is indeed very difficult and calls for a complete overhaul of standard setting in Russia, was passed with 344 votes for and zero votes against. This testifies to the significant preliminary work done. You may recall that you chaired a meeting where we made a highly detailed report. We are continuing to work both with businesses and with society.

Vladimir Putin: Well, we know that businesses had their own particular concerns. How have you dealt with it? Was the business community involved in drafting these laws?

Yury Trutnev: We held regular meetings, Mr Putin. We are not inventing anything new here; we are fully adjusting to the Russian reality the system of transitioning over to BAT that has been adopted in the European Union and  developed in Germany.

Vladimir Putin: That's great, but the conditions there are somewhat different. I'll repeat my question once again: have you discussed it with the business community?

Yury Trutnev: Yes, Mr Putin. If you remember, almost all objections had been removed even before the meeting, otherwise we would not have held it… There were a number of technical issues, related to inaccuracies of interpretation. We gave all necessary explanations regarding these issues, and this may have been the reason for the voting results. I would like to say that these laws – going over to BAT and waste recycling – along with efforts to clean up the Russian territory that we have reported to you about – are creating favourable conditions to clean up the country over the next few years, by 2020.

Vladimir Putin: Do they correspond with the requirements that are in place in the European Union?

Yury Trutnev: Yes, Mr Putin, and they envisage all the necessary transitional periods. The voluntary introduction of best practicable environmental options begins two years after the law enters into effect. Mandatory introduction begins after eight years, which leaves sufficient time for all economic agents to adjust.

Vladimir Putin: Good, thank you. By the way, we are currently hosting an aviation summit in St Petersburg with our European colleagues. Mr Ivanov has been there. Did you see anything interesting?

Sergei Ivanov: Mr Putin, colleagues. Yesterday I attended the EU-Russia aviation summit in St Petersburg. This is the first such summit that we have organised in the history of our interaction with the European Union. In the format of round table discussions and conferences, the aviation authorities of Russia and the EU, owners of transport infrastructure, executives of the aircraft industry and, most importantly, executives of leading aircraft companies discussed the problems, prospects and potential of our cooperation.

It should be noted that the EU is our main partner in the area of passenger air transit service. As much as 40% of all international flights carried out by Russian airlines have their destination in EU member states. In recent years, we have seen passenger traffic between Russia and EU countries growing steadily, despite the financial and economic crises. This year alone, passenger traffic to the EU grew by 18% and cargo air traffic by as much as 38%. Naturally, this heavy flow of traffic requires Russia and the European Union to coordinate their standards, air traffic management systems, airport infrastructure and, of course, security issues.

During the conference, we of course discussed problematic areas that exist between us and the European Union. One of the main issues – and the Russian side firmly brought this up once again – is the EU directive (of which many people must have heard) that applies so-called emission quotas, that is, additional duties for the emission of greenhouse gases into the atmosphere, to all international flights over the EU territory.

Environmental issues are, of course, very important, and we are addressing them as well. I can cite one fact. Compared to 2004, our aircraft fleet has almost doubled, despite the problems we have in the civil aircraft industry – but the amount of our greenhouse gas emissions have not changed, because the fleet was renewed with modern aircraft that use energy-efficient and environmentally-friendly engines.

Our position is that these additional duties, first of all, would most likely result in financial damages to the airlines. Secondly, if such measures need to be introduced, this should be done on the basis of international law, the Chicago Convention and the regulations of the International Civil Aviation Organisation.

Our position is shared by the United States, China and India, which also argue that the issue can be debated, but on the basis of general regulations rather than just directives set unilaterally by the European Union. We’ve discussed this problem in detail, including…

Vladimir Putin: We should try to seek solutions in the form of compromise through dialogue. So far, I think we’ve been able to achieve that in general, including through negotiations regarding WTO accession. In this area, too, we can reach a consensus.

Sergei Ivanov: With regard to the issue you’ve touched upon, the Russian side has reaffirmed the agreements that have been reached concerning Trans-Siberian routes in 2006. Back then, Russia promised to stop charging additional fees for flights over Siberia once it joins the World Trade Organisation. We’ve now reiterated this position to our partners, and they seem satisfied.

Also, as you know, a long time ago the European Union suggested that the so-called national carrier be replaced by a European carrier, in compliance with EU standards. And we've already started down this road. We’ve signed our first agreement to that effect with Finland, in which the term “national carrier with EU countries” is replaced with the term “European carrier”. We’ve reached a compromise there, and our companies…

Vladimir Putin: That is not a compromise. That is a concession on our part.

Sergei Ivanov: Yes, you're right. But we aren't losing anything because of it, since the frequency of flights operated by Russian carriers remains the same.

Vladimir Putin: We're better off not telling them that we don’t stand to lose anything. We should emphasise that we’re making a concession.

Sergei Ivanov: Speaking of flight safety regulations, I’d like to report that the Transportation Ministry has come out with a proposal (one that I approve), that starting on November 17, Russia should reduce the flight separation altitude limit in its airspace down to 150 metres. This measure will bring our standards in line with those of the EU, while at the same time enabling us to cut down on the use of fuel and to reduce greenhouse gas emissions into the atmosphere. The decision has been made, and efforts toward standard uniformity are continuing.

Vladimir Putin: Good. Thank you.

I’d now like to move on to discussing perinatal centres. Our declining population remains one of the most acute problems that we face, as well as our European neighbours. So let’s discuss this. One way to resolve this problem is by building high-tech perinatal centres. We’ve launched a large-scale programme for the construction of such centres. There have been delays on some of the projects, but, as far as I know, most are up to schedule. Can you please update us on this? Who is lagging behind, and what is a realistic timeframe in which the programme can be fully implemented?

Tatyana Golikova: We are planning to create 24 of these centres: 22 regional and 2 federal. One of the federal centres was launched a while ago, and the other will go into operation in 2014. As for the 22 regional centres, out of the six centres that remain to be launched, two have become operational since we met to discuss the issue in Smolensk this past August.

One of the perinatal centres has been launched as a unit within the Amur clinical hospital. This clinic, which has been in operation since September 10, 2011, has an annual capacity of 3,000 deliveries. It has so far attended to the birth of 60 infants, and the number of mothers who birth here continues increasing. As for the Baikal Region and the city of Chita, our deadline there is October 1.

Vladimir Putin: And they did meet the deadline, didn’t they? I was told this by their governor.

Tatyana Golikova: They received licenses for medical and pharmaceutical services on the 28^th, and are set to begin operations on October 20. As for the four other perinatal centres, this is what the situation is currently like there. The deadline for Krasnoyarsk is December 2011. That’s the date that was set for them right at the start, and they haven’t modified the original schedule ever since. As for Kurgan, the latest deadline that you set for them after repeated postponements… 

Vladimir Putin: After just two postponements, actually…

Tatyana Golikova: Right, December 2011. According to the region’s own figures, they are sticking to your deadline. But the construction of the overland sites there is reportedly only 47% to 95% completed. This is due to problems of water supply, medical gases, and so forth. Still, they aren’t putting off the deadline, and they are confident that they will deliver on their commitment to complete the construction in December.

The situation is more alarming with two other perinatal centres, namely in Saratov and in Perm. In Perm, too, there have been postponements, and the governor’s latest pledge was to meet the October 15, 2011 deadline. In Saratov, the deadline is set for November 1. Earlier today I asked the regional director of the Federal Agency for the Oversight of Public Health and Social Affairs (a health watchdog agency accountable to the Health and Social Development Ministry) to go visit the site and see how far they have advanced.

As for Saratov, they said they will complete construction on December 1 and will launch the project on December 31. No additional explanations concerning…

Vladimir Putin: So when is the launch date?

Tatyana Golikova: Construction will be completed on December 1 and the launch date is set for December 31.

Vladimir Putin: Right on New Year’s Eve?

Tatyana Golikova: Yes. According to your instructions, the deadline was set on November 1. And they haven’t provided any explanations so far as to why they have put it off till December 31.

As for Perm, they are likely to deliver on time. Most of their projects are 99% or even 100% completed. But there’s just one problem. According to reports from regional officials, one of their basements became flooded a week ago, as the result of a sewage water leak, and it took them some time to get the premises dry with the use of air cannons. But the job is almost done by now.

Vladimir Putin: Well, if what they say is true, there’s little to worry about. But if their waterproofing is poorly done, things may get worse.

Tatyana Golikova: I’ve instructed our ministry’s regional representatives to monitor the situation there. According to a deputy prime minister of the Perm Region, the project is certain to be launched on the 15^th. I’m concerned, though, that they won’t be ready by the 15^th as they have not yet obtained any licences. And how can they possibly be obtained in just one day?

Vladimir Putin: Well, please ask the governors of the Perm Region, as well as those of Saratov and Kurgan to come see me. Find some time during the week and arrange for the governors to come by, with all relevant documents on them. Is work on the other projects proceeding smoothly?

Tatyana Golikova: Yes.

Vladimir Putin: Good. Thank you. This means that by the year’s end , all 24 …

Tatyana Golikova: Twenty-two regional centres and one federal centre have been put into operation already. One other federal centre is currently in the design stage; this one will be launched in 2014.

Vladimir Putin: Twenty-three will be operational before the end of this year, correct?

Tatyana Golikova: Exactly.

Vladimir Putin: Good, thank you. Last week I asked you to look into the progress in the distribution of funds allocated to colleges and universities for a planned increase in student aid. Last time, we received reports that not all of the schools had done what they were supposed to do with that federal money. Please update us on the situation.

Inna Bilenkina (Deputy Minister of Education and Science): Mr Putin, in accordance with your instructions, the student aid fund has been increased by 9% starting on September 1. To discuss the current situation, we arranged a special telephone conference. This event brought together 103 colleges and universities, officials from various government agencies, including the Ministry of Finance, the Ministry of Culture, the Ministry of Health and Social Development, the Auditing Chamber, and the Ministry of Sport and Tourism, as well as representatives from various youth and student organisations, including the Russian Association of Student Trade Unions, the Russian Union of Student Organisations, the Russian Youth Union, and the National Student Council. 

The conference, chaired by Andrei Fursenko, was attended by representatives of student organisations as well as university and college chancellors. 

Mr Fursenko spoke with people from both groups. All the participants, except perhaps one college, confirmed that all the additional funds allocated by the government had been distributed to their students. Our ministry found it disconcerting, though, that despite their more proactive approach and their independence, colleges and universities delayed this distribution somewhat, and that it was not until the ministry forwarded a letter to subordinate agencies on September 23 that these schools got the job done, distributing all aid to their students by October 1.

We sent this letter around to news organisations as well, on October 7. The colleges and universities committed themselves to making their work regarding this aid transparent, posting relevant information on their official websites and publishing it in the media, with which they collaborate in the regions. 

Some of the federal media outlets have already published content on that phone conference. These include Channel One of Russia’s national television, Rossiiskaya Gazeta, Gazeta.ru, Komsomolskaya Pravda and many Web resources, including ones run by youth organisations. The good news about the 9% increase to student aid seems to have finally reached each and every student in this country.

These funds were distributed in two ways. Under the first one, all students receiving educational allowances saw a 9% increase. The second one had all the funds accumulate in the university, and the boards set up by rectors or student organisations distribute additional allowances anywhere from 500 roubles to 3,000 roubles among students. These allowances were paid to students with good academic, athletic, and research performance, as well as to those who are actively engaged in cultural and volunteer activities. In fact, these two distribution systems were equally popular with higher educational institutions.

Vladimir Putin: Yes, this can be done either way: raise allowances by 9% or, as you said, accumulate money in the funds and then distribute them among students depending on their financial status and achievements. However, if they choose the second option, then student organisations should be broadly involved in addressing these issues. As a matter of fact, this question is within the competence of the higher educational institutions themselves. They are entitled to do so and should exercise their right to do so. Importantly, the money that we have made available to higher educational institutions should reach the end users, meaning students. Please see it through to completion and make sure that the money ends up with the students without any glitches. Agreed?

Inna Bilenkina: Yes, Mr Fursenko asked to pull up a few random websites run by higher educational institutions during the conference call, and we saw that these websites had information about the disbursement of these additional allowance funds.

Vladimir Putin: Good. What we need is that the money – not just information about their entitlement to this money – reaches students. Agreed.

We see positive growth in the labour market. Overall, the unemployment numbers are down by 1.2 million people to 4.6 million as compared to 5.8 million earlier this year. Same figures apply to registered unemployment. This year, despite the downtrend in the unemployment rates that began early in 2011, we still released over 16 billion roubles to the regions to support the labour market. In general, the outcome is good – that much is clear. As we have already mentioned, we reached pre-crisis unemployment levels, and even brought them down a bit lower. Please, Mr Zhukov, could you please say a few words about this.

Alexander Zhukov: Yes, Mr Putin, that’s absolutely correct. There were 4.6 million unemployed in Russia as of late September, down from 5.8 million in January. If compared with pre-crisis levels, we had exactly 5 million unemployed in October 2008. In other words, we now have 400,000 fewer unemployed than before the crisis. In percentage terms…

Vladimir Putin: That was in late 2008.

Alexander Zhukov: Yes, before the crisis. Taken as percentage of the total number, it’s 6% now as compared with 6.6 % previously. As far as job seekers registered with employment centres go, their numbers fell almost by 340,000 people since earlier this year. The trend has invariably been positive here as well. Perhaps, most importantly, the number of job openings grew by 403,000 from January to September. The total number of vacancies stands at 1.442 million today. Thus, the demand for workers is actually greater than the number of registered unemployed, whereas the labour market tension ratio stands at 1 today. However, this does not mean that the situation is even across Russia. There are regions where the situation is fairly tense, primarily in the North Caucasus.

Vladimir Putin: Good. Next time you go over these regional programmes, please focus on these problem areas.

Alexander Zhukov: Mr Putin, we have made provisions for 2012 – as a matter of fact, the bulk of this work is in the regions – to implement federal programmes in the regions plagued by unemployment, primarily the North Caucasus.

Vladimir Putin: Good. It is comforting to know that we have achieved good results in generating consolidated budget revenues. Overall, consolidated budget revenues are up 18%, while the revenue tax – a very important indicator – grew by 30%. Please, Mr Siluanov, go ahead.

Anton Siluanov: Yes, indeed, Mr Putin, we saw steady revenue flows to the budgets of the Russian regions this year. The budgets of the Russian regions have seen 18% growth, or about additional 670 billion roubles, since early 2011. The federal tax revenue flow has been steady: the individual income tax increased by 11% as compared with the same period last year. As you said, the revenue tax is growing at a fast pace. Regional and local taxes are flowing steadily as well. Budget spending of the Russian regions are growing at a somewhat slower pace as compared with revenue: they are up 11%, or about 500 billion roubles.

Vladimir Putin: You are talking about the regions?

Anton Siluanov: Yes, Russian regions. Significantly, investment spending is growing very fast. The investment spending of the Russian regions grew by 18% as compared with the same period last year to a total of 605 billion roubles. The investment activity in the regions is gradually recovering. We can see a steady regional budget surplus over the past nine months at almost 800 billion roubles, which is 80% more than during the same period last year. Therefore, we strongly recommend that regional authorities save this deficit and withhold from engaging in additional spending on top of the already approved programmes…

Vladimir Putin: Surplus.

Anton Siluanov: Yes, surplus, my mistake… but instead establish reserves for the next year. There might be problems next year, and the regions should protect themselves against adverse developments by creating reserve funds that they can use to support smooth budget implementation next year. There are several regions that cause concern: their debt level exceeds the established critical level. There are about ten such regions. We are also recommending that such regions use their additional revenues to reduce their state debt. We have established monitoring arrangements at the Finance Ministry and are coordinating our budget policy with the regions. Mr Putin, in the near future we will coordinate the 2012 budget drafts with the trouble regions, so as to be able to issue recommendations seeking to adjust their budget policies.

Vladimir Putin: Please remind me how did we, the federal government, distribute additional revenues? How much of these additional revenues will go to reserve funds instead of being spent?

Anton Siluanov: This year about 550 billion roubles will go to reserve funds. The amendments that we have considered at the Government Presidium meeting and that will soon be considered by the State Duma have only 99 billion roubles for spending, while the rest will be used to increase our reserves, which will come to 1.7 trillion roubles by the end of the year.

Vladimir Putin: Is that the Reserve Fund?

Anton Siluanov: The reserve fund, not including the National Wealth Fund.

Vladimir Putin: So, the Reserve Fund has 1.7 trillion roubles. What about the National Wealth Fund?

Anton Siluanov: It has 2.6 trillion roubles.

Vladimir Putin: 2.6 trillion roubles in the National Wealth Fund. It will also grow slightly, won’t it?

Anton Siluanov: Yes, it will a little.

Vladimir Putin: If we assume that all additional revenue is 100%, how much do we send to reserves in percentage terms?

Anton Siluanov: I believe we will send about 80% of all tax revenue to the Reserve Fund.

Vladimir Putin: Then tell the regions to use about the same proportion. Certainly, circumstances vary across the regions, but you can still analyse financial situations in the regions and guide them accordingly. Please make sure that these recommendations reach our colleagues in the regions.

Anton Siluanov: I will, Mr Putin.

Vladimir Putin: Let’s say a few words about today’s agenda.

It’s the middle of autumn, colleagues, which means that it’s time to sum up the results of our preparations for the autumn-winter season, all the more so since this season is already underway in many Russian regions. Russia is a predominately northern country, and the weather is already fairly cool in many areas, to put it mildly.

We all know that the responsibility for the condition of housing and utilities infrastructure primarily lies with regional and municipal authorities. However, since users constantly run into problems in this sphere, which is vital for Russia, we have to look into its workings at the federal level. We will continue to do so until we can see this sphere is in satisfactory shape across Russia.  

Judging from preliminary materials, preparations for the winter are following their normal course this year. Territorial power systems and public utilities have completed a vast amount of repair work and formed requisite reserves. I have the following information: 99.4% of the housing stock is ready for the heating season, 99.1% of boiler rooms, 99.7% of heat supply networks, and 99.6% of water supply networks were ready for the heating season as of October 1. Gas reserves are available in full, orders for the necessary amounts of fuel oil were placed, and so on.

I would like the Energy Ministry and the Ministry of Regional Development to focus on the following areas, particularly what is called big energy. The figure of 99% is a general number. I want you to make sure that we don’t end up in a situation where we have excess supplies in some regions and inadequate supplies in others. We have a general number of 99.7%, but in fact it may mean that we have 50 plus in one region, and 100 plus in another. That’s not the way it should be. Everything should be spread out evenly across the country.

The Energy Ministry has developed monthly energy balances for each Russian region. I hope they do conduct ongoing monitoring to make sure power stations have the required reserves in place.

What we are looking at is not the overall picture but, as I mentioned earlier, the situation in each specific region, urban or rural centre, because even minor glitches may result in serious consequences for our people. Therefore, please focus on problem areas today, the ones that are confronted with delays in financing and completion of work, similarly to Ms Golikova’s report on perinatal centres. Even if we have 90% plus overall, if work hasn’t been completed in three regions, then this is a problem for the entire system. We need to look into what’s going on there, which is particularly important in light of preparations for the winter. We need to look into measures seeking to redress the situation as soon as possible. So, I would like to talk about these particular territories (please focus on them today) where problems haven’t been solved yet. I have a list of such areas. Work in only 52 regions has been financed in full.

In this regard, I would like to bring several issues to your attention. It goes without saying that only professional and responsible companies that are prepared to invest in expansion of their business should work in this industry, not some fly-by-night operators or wheelers and dealers whose only concern is to collect money from the people and misappropriate budget funds. I have also looked at some papers from the law enforcement agencies: there are many questions for the managing companies regarding what they do with the funds that they collect from the people.

We have made a joint decision to limit rate increases by most natural monopolies next year. This should go a long way toward containing the growth of utilities bills. Let me repeat: this is the principled stance of the Russian government, which is not subject to revision. Therefore, any official statements about the possibility of adjustments or deviations are inadmissible. However, I’m already hearing them. Please stop this. Let me stress it again: all rate-related decisions are final and not subject to revision.

Another agenda item that we will look into today is establishing the Federal Accreditation Service. As you may recall, we have conducted an in-depth inspection of the state’s oversight and surveillance functions over the past two years and removed many administrative barriers in education, healthcare, agriculture, construction, and some others. The number of activities subject to licensing went down from 80 to 49. Please note that many procedures involved in licensing will be revised in 2012 and become electronic. The period of validity of licenses will not be restricted.

In addition, the scope of mandatory certification was significantly scaled down. Now, 46% of goods and services are subject to such certification, but we are looking to halve this number. We do so in order to support business, make it easier for new companies and manufacturers to access the market and make sure that law-abiding entrepreneurs feel secure and do their work rather than waste their time in the hallways of various administrative buildings.

The interests of consumers should also be safeguarded. Here we are focusing on modern arrangements to ensure product and service safety and quality. We are also counting on increased responsibility of manufacturers, a greater role for self-regulating agencies, and accreditation and liability insurance institutions. Businesses are confronted with certain difficulties in this area, including lack of transparency and biases on behalf of certain oversight and inspection systems that give the green light to dubious experts thereby setting up grounds for corruption and jeopardising public safety by compromising the safety of individuals.

Last year we approved the concept for forming the single national accreditation system. They proposed establishing a shared body vested with the requisite authority in this area. Today we will look into regulations governing the work of such a body, namely the Federal Accreditation Service. It will be engaged in establishing rules for professional organisations regarding certification, test labs, and expert organisations. Certainly, building such an entity in full, bringing in personnel and getting this agency up and running will take time; therefore the transfer of authority will happen gradually.

There’s one more point that I would like to make: building this single service will help significantly cut the number of bureaucrats who are now in charge of these issues in many ministries and departments. We expect local self-government bodies and non-profit organisations, such as consumer rights protection associations, unions of entrepreneurs and many others to play an active role in the work of the Federal Accreditation Service. One of the key goals of the new service is to establish close cooperation with these entities.

One more point in closing: we will need to take a decision on the establishment of an organising committee to promote the application filed by Yekaterinburg to host the international all-purpose exhibition EXPO 2020. The government considers bringing such projects to Russia a priority, and our strategy aims to have as many Russian cities as possible host such events. Such major events give a strong impetus to the development of these territories, encourage Russian and foreign businesses to work in Russia, and strengthen Russia’s stance internationally. I suggest that we support Yekaterinburg as the host of EXPO 2020 and take the decision to establish a corresponding organising committee.