The following issues are scheduled for discussion at the Government meeting on December 22, 2008:

1. The draft state defence order for 2009 and for the planning period of 2010 and 2011

2. Introducing amendments to the regulations of federal bodies of executive authority for the purpose of implementing Federal Law No. 160-FZ of July 23, 2008 On Introducing Amendments to Certain Legislative Acts of the Russian Federation Relative to Improving the Exercise of Authority by the Government of the Russian Federation

3. Introducing amendments to the Administrative Offences Code of the Russian Federation, Federal Law On Protection of Competition, and certain other legislative acts of the Russian Federation

The draft Federal Law On Introducing Amendments to the Administrative Offences Code of the Russian Federation, Federal Law On Protection of Competition, and Certain Other Legislative Acts of the Russian Federation was drafted for the purpose of improving anti-monopoly regulation and developing competition.

The draft law is meant to specify the procedure of applying anti-monopoly legislation to persons outside the Russian Federation and influencing the situation with competition in the Russian Federation.

The draft law specifies the procedure of determining a high (low) monopoly price for goods and allows using a cost criterion if there is no comparable goods market on the territory of the Russian Federation. More specifically, a provision is made for including a group of individuals who co-own more than 50% of voting stocks (shares) of a commercial company (partnership) into the definition of a group of persons (Article 9). These amendments are aimed at eliminating opportunities to break this law.

The drafted amendments to Article 10 of the Law on the Protection of Competition are designed to prevent natural monopoly holders from creating discriminatory conditions. Thus, to prevent natural monopoly holders from taking actions that can put certain legal entities into a situation of inequality as compared to other legal entities, the draft law secures for the Government of the Russian Federation the right to define the rules of non-discriminatory access to commodity markets and to the goods that are produced (sold) by natural monopoly holders.

Clarifying the rules of non-discriminatory access is aimed at improving availability of information to consumers, defining conditions of access to goods and services of natural monopoly holders, and using standard form contracts that will limit opportunities for discrimination in the spheres of activities of natural monopoly holders.

Currently the Law On the Protection of Competition contains a list of agreements and concerted actions that are unconditionally banned regardless of whether sides of an agreement or participants in concerted actions are competitors in their respective market.

To eliminate the situations when, technically, agreements and concerted actions of legal entities that are not competing in the market are unconditionally banned but do not lead to negative consequences in the market, the draft law makes amendments to Article 11 of the Law On the Protection of Competition as to differentiate between unconditional bans of making agreements and (or) taking concerted actions by competing legal entities and by such legal entities that are not competitors.

The draft law will tighten requirements for the authorities by introducing a ban on state and (or) municipal preferences (Article 15) with the exception of cases stipulated in Chapter 5 of the Law On the Protection of Competition.

Furthermore, the draft law introduces amendments to Articles 19-21 of the Law On the Protection of Competition specifying the grounds for and the procedure of giving authorised state and (or) municipal preferences as well as the procedure of getting a permission for authorities to issue such preferences from an anti-monopoly body. In addition, the draft law specifies the definition of a "state or municipal preference" (Article 4) as to extending it to providing property benefits. It is important to note that the suggested definition of a "state or municipal preference" conforms to the norms of European law better than the definition of this notion in the current version of the Law On the Protection of Competition.

Amendments to regulating the procedure of giving a state or municipal preference are aimed at eliminating opportunities for arbitrary law enforcement by government bodies and local authorities.

The draft law makes amendments to Article 18 of the Law On the Protection of Competition specifying financial services that financial institutions can provide to state bodies, local authorities, state extra-budgetary funds and natural monopoly holders only through a tender in accordance with the provisions of the federal law on delivery of goods, execution of work, and providing services for state and municipal requirements.

The draft law specifies powers of an anti-monopoly authority including the definition of powers of an anti-monopoly authority to carry out inspections of state government bodies and legal entities and specification of actions of anti-monopoly body officials when verifying observation of the anti-monopoly law as well as recording and documenting the evidence proving the fact of offenses revealed by the inspection.

The drafted amendments to Chapter 7 of the Law on the Protection of Competition are intended to prevent monopolisation of commodity markets. These changes are aimed at creating a more effective mechanism of control over economic concentration. Additionally the said amendments specify a list of data presented to an anti-monopoly authority, particularly, information about real owners of companies.

Moreover, to reach the said objective the draft law is designed to specify reasons for not approving of an agreement (or other action) as well as the consequences of concluding an agreement (or other action) without the approval from an anti-monopoly authority.

The drafted amendments to Chapter 7 of the Law On the Protection of Competition are also aimed at lowering administrative barriers. The amendments allow expanding and defining clearly a list of grounds for persons to make deals without a prior approval from an anti-monopoly authority.

Furthermore, the draft law significantly increases companies' assets and turnover thresholds requiring a prior approval of agreements and other actions by an anti-monopoly authority or notification of an anti-monopoly authority. The asset thresholds for a prior approval are increased from 3 billion roubles to 7 billion roubles, and turnover thresholds are increased from 6 billion roubles to 10 billion roubles.

At the same time assets thresholds for notifying an anti-monopoly authority of closed deals and other actions are doubled.

The draft law eliminates the need to get a prior approval, related to the control over economic concentration, of deals connected with purchasing plots of land, buildings, structures, and unfinished construction projects.

The said suggestions will allow significantly decreasing the administrative burden on medium-sized businesses and focusing on serious infringements of the anti-monopoly law.

The draft law introduces amendments to Chapter 9 of the Law on the Protection of Competition. The said changes provide an opportunity to consolidate cases of anti-monopoly law infringements and separate such cases from others if it contributes to more comprehensive and objective hearings.

In addition, the draft law includes provisions giving defendants charged with anti-monopoly law infringement a right to request an extension of execution of improvement notice.

Currently, a number of laws are in effect on the territory of the Russian Federation that define anti-monopoly requirements in certain spheres of the economy, in particular, requirements to conduct tenders for receiving a variety of rights.

Accordingly the draft law introduces amendments to the Forest Code of the Russian Federation, the Law of the Russian Federation On Subsurface Resources, the Land Code of the Russian Federation, the Urban Development Code of the Russian Federation, and the Federal Law On Concession Agreements.

4. The draft Federal Law On Invalidating Certain Provisions of Legislative Acts of the Russian Federation on the Legal Status of Foreign Nationals in the Russian Federation

This draft federal law is intended to annul Paragraph 11 of Article 7 of Federal Law No. 115-FZ dated July 25, 2002 On the Legal Status of Foreign Nationals in the Russian Federation. According to this law a temporary residence permit to a foreign national is not issued, and a previously issued temporary residence permit can be annulled in the procedure set by the Government if the quotas instituted according to this federal law are used up or reduced by the Government.

Article 7 of the federal law stipulates reasons of denial or annulment of a temporary residence permit for foreign citizens that suggest illegality and criminality of actions of foreign nationals.

Reduction of temporary residence permit quotas by the Government, as it follows from Paragraph 11 of Article 7 of the federal law, is not related to illegal behaviour of a foreign national, and in this case the annulment of a previously temporary residence issued permit can be viewed as a limitation of rights given to a foreign national by the federal law.

To avoid a limitation of rights of foreign nationals it is necessary to declare void the provision of the federal law giving the Government the powers mentioned above.

In addition, it is necessary to introduce amendments to Federal Law No. 110-FZ dated July 18, 2006 On Introducing Amendments to the Federal Law On the Legal Status of Foreign Nationals in the Russian Federation and to annul certain regulations of the Federal Law On Introducing Amendments and Additions to Certain Legislative Acts of the Russian Federation, and to Federal Law No. 2-FZ of January 6, 2007 On Introducing Amendments to the Federal Law On the Legal Status of Foreign Nationals in the Russian Federation and annulling certain regulations of the Federal Law On Introducing Amendments and Additions to Certain Legislative Acts of the Russian Federation.

5. The draft Federal Law On Ratification of the Protocol to the Convention Between the Government of the Russian Federation and the Government of the Czech Republic On Avoidance of Double Taxation and Prevention of Tax Evasion with Respect to Taxes on Income and Capital

The goal of the above-mentioned Protocol is to specify certain terms of the Convention (international transport, permanent mission, dividends, interest, royalty, etc) and to add a number of regulations to it that will allow the Russian Federation and the Czech Republic to make the exchange of taxation information more effective.

The amendments introduced to the Convention in accordance with the Protocol (Paragraph 3a of Article 5, Paragraph 3 of Article 24, and Paragraph 2 of Article 26) are not of critical nature, but they correspond to the modern norms of international taxation, in particular, the OECD Model Tax Convention on Income and on Capital.

The Protocol corresponds to the provisions of the typical Convention on Avoidance of Double Taxation of Income and Property, approved by Government Resolution No. 352 of May 28, 1992 On Concluding Intergovernmental Agreements on Avoidance of Double Taxation of Income and Property.

The Protocol is to be ratified in accordance with paragraph 1 of Article 15 of the Federal Law On International Treaties of the Russian Federation, because it contains regulations that differ from the ones stipulated by the laws of the Russian Federation as related to the taxation of income received by taxpayers of the contracting states.

6. Introducing an amendment to Resolution of the Government of the Russian Federation No. 159 of April 6, 2004

This draft resolution is designed to optimise the work of and to ensure the proper execution of powers by the Federal Service for Supervision of Education and Science in accordance with Government Resolution No. 552 of July 21, 2008 On Introducing Amendments to Certain Acts of the Government of the Russian Federation related to the work of the Federal Service for Supervision of Education and Science, which assigns to the Federal Service for Supervision of Education and Science a number of new powers, previously not exercised by the Service.

Proper execution of the new powers requires the creation of new divisions within the Federal Service for Supervision of Education and Science, which are going be assigned to the corresponding new tasks of the Service.

In connection with this draft resolution it is suggested to introduce amendments to Government Resolution No. 159 of April 6, 2004 Issues of the Federal Service for Supervision of Education and Science in terms of increasing the number of departments (up to seven) according to the main areas of work of the Federal Service for Supervision of Education and Science.

The new departments will ensure execution of the following powers:

- supervision and control over the thoroughness and quality of exercising delegated powers of the Russian Federation by the state government bodies of constituent entities of the Russian Federation in the area of education with a right to conduct inspections of the corresponding state government bodies of constituent entities of the Russian Federation as well as educational institutions located on the territory of the constituent entities of the Federation, to issue mandatory orders to eliminate discovered violations, to bring to justice, in accordance with the law of the Russian Federation, officials of the executive government bodies of constituent entities of the Federation exercising delegated powers of the Russian Federation in the area of education as well as officials of educational institutions located on the territory of the constituent entities of the Russian Federation, to dismiss from office the said officials;
- supervision over legal regulation conducted by the state government bodies of the constituent entities of the Russian Federation on the issues of delegated powers of the Russian Federation in the area of education, with the right to issue mandatory notices on the annulment of the legal acts or on making amendments to those acts;
- control over spending the funds for exercising delegated powers of the Russian Federation by the constituent entities of the Federation in the area of education within the scope of their competence;
- approving the structure of the executive government bodies of the constituent entities of the Federation, exercising delegated powers of the Russian Federation in the area of education, publishing guidelines on the teaching methodology and mandatory teaching materials on the issues related to the execution of the delegated powers of the Russian Federation in the area of education by the executive government bodies of the constituent entities of the Federation;
- setting requirements for the content and forms of reporting documents and for the procedure of submitting reporting documents on exercising delegated powers of the Russian Federation in the area of education;
- analysing reasons for the discovered infringements when exercising delegated powers of the Russian Federation in the area of education, taking measures to eliminate those infringements;
- presenting to the Ministry of Education and Science of the Russian Federation an annual report on exercising delegated powers of the Russian Federation in the area of education by the constituent entities of the Federation;
- the increase in the number of departments will remain within a limit set by Paragraph 3 of Government Resolution No. 552 of July 21, 2008 On Introducing Amendments to Certain Acts of the Government of the Russian Federation related to the work of the Federal Service for Supervision of Education and Science of the maximum number of employees at the central office of the Federal Service for Supervision of Education and Science through reorganising the structure of the Service.

Payment of expenses related to the implementation of the draft regulation will be conducted within limits of the federal budget allocations to the Federal Service for Supervision of Education and Science for leadership and management in the established sphere of activities.

Approval of this draft resolution of the Government of the Russian Federation will not require allocating additional funds from the federal budget.

7. Introducing amendments to the Regulations on the Ministry of Healthcare and Social Development of the Russian Federation and Regulations on the Federal Supervision Service for Healthcare and Social Development

The goal of this draft resolution is to ensure implementation of norms of Federal Law No. 48-FZ of April 24, 2008 On Guardianship and Trusteeship.

The main tasks of state regulation of activities related to guardianship and trusteeship are set by the federal law and aimed at securing protection of rights and legitimate interests of citizens, securing a decent standard of living of people in ward, exercising incumbent powers by the bodies of guardianship and trusteeship, guardians and trustees.

Accordingly, paragraph 5 of Article 6 of the federal law stipulates that control over activities of the bodies of guardianship and trusteeship is exercised by a federal executive government body authorised by the Government.

The Federal Supervision Service for Healthcare and Social Development is the federal executive government body which exercises control and supervision in the areas of healthcare and social development.

In light of this the draft resolution will give to the said federal service the corresponding powers related to the activities of the bodies of guardianship and trusteeship regarding legally incapable adults or partially legally capable citizens.

Participation of the Federal Supervision Service for Healthcare and Social Development and its territorial bodies in these activities will allow, first of all, control and supervision of medical institutions, social service organisations and other organisations that in accordance with the provisions of the federal law are entrusted with the custody of legally incapable adults or partially legally capable citizens.

On the basis of the above mentioned draft regulation there will be amendments to the Regulations on the Federal Supervision Service for Healthcare and Social Development approved by Government Resolution No.323 of June 30, 2004, adding subparagraph 5.1.3.9 to subparagraph 5.1.3. This new paragraph will assign to the said federal service a power to supervise activities of the bodies of guardianship and trusteeship regarding legally incapable adults or partially legally capable citizens.

Specification of the functions of the Federal Supervision Service for Healthcare and Social Development by the draft regulation will not require allocating additional funds from the federal budget. The additional function of supervising activities of the bodies of guardianship and trusteeship regarding legally incapable adults or partially legally capable citizens will be performed within the limit of the maximum number of employees of the central office of the Federal Supervision Service for Healthcare and Social Development and of the budgetary provisions.

8. Allocating budgetary funding to the Government of the Sakha Republic (Yakutia) from the reserve fund of the Government of the Russian Federation for prevention and relief of emergency situations and natural disasters

The draft executive order is brought in by the Ministry of the Russian Federation for Civil Defence, Emergency Situations and Disaster Relief in order to implement directives of the Government No. ISh-P4-4349 of July 17, 2008, and No. ISh-P4-5582 of September 12, 2008.

The draft executive order is prepared in accordance with the rules of allocating money from the reserve fund of the Government of the Russian Federation for prevention and relief of emergency situations and natural disasters set by Government Resolution No. 750 of October 13, 2008.

In spring and summer of 2008 the floods on the territory of the Republic of Sakha (Yakutia) harmed the population and caused significant material damage to the facilities of housing and utilities infrastructure, as well as the social sphere.

The Government of the Republic of Sakha (Yakutia) estimates the total material damage to exceed 900 million roubles.

According to the draft executive order in Quarter 1 of 2009 195,761,500 roubles will be allocated to the Government of the Republic of Sakha (Yakutia) from the reserve fund of the Government of the Russian Federation for prevention and relief of emergency situations and natural disasters including 35,935,000 roubles as non-returnable financial aid to the victims, 7,105,300 roubles for financing rescue operations, and 152,721,200 roubles for financing urgent relief work.

9. Allocating funding to the Administration of the Sakhalin Region, partially to cover the expenses involved in disaster relief following the August 2, 2007 earthquake in the area of the Nevelsk District, Sakhalin Region, from the reserve fund of the Government of the Russian Federation for the prevention of emergency situations and disaster relief, to render victims financial aid following the loss of their property and based on court decisions.

On August 2, 2007 an earthquake on the territory of the Sakhalin Region caused substantial material damage to the population and federal property. 7,761 people (3,406 families) lost their homes.

It was considered necessary to conduct emergency rescue and reconstruction work of the federal facilities, to deploy and maintain temporary housing and meal stations for the victims, to give state housing certificates to citizens who lost their homes and to provide financial assistance to victims who lost their belongings.

According to the Sakhalin administration estimate the material damage from the emergency situation exceeded 10 billion roubles, meanwhile the regional and municipal budgets provided around 400 million roubles for the mitigation of its consequences.

Government executive orders of No. 1281-р of September 27, 2007, No. 1453-р of October 20, 2007 and No. 411-р of March 29, 2008 allocated 201,876,000 roubles to the Sakhalin Regional Administration to provide financial aid to the victims of the emergency situation who lost their property.

In order to implement court decisions and after approving the validating documents presented by the Administration of the Sakhalin Region it was considered necessary to allocate additional 3,675,500 roubles to the Administration of the Sakhalin Region to provide material aid to the victims from the reserve fund of the Government for prevention and relief of emergency situations.

Approval of this draft will allow to fully implement court decisions, in accordance with which as of November 26, 2008 all responsible parties (debtors) had complied with the court orders.

December 19, 2008
Moscow

* 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.