The following issues are scheduled for discussion at the November 24, 2009 meeting of the Presidium of the Government of the Russian Federation (Press Release):

1. Draft Plan (Programme) for Federal Property Privatisation for 2011 and Guidelines for Federal Property Privatisation in 2011 and 2012

The Draft is aimed at optimising the government property sector and generating revenue from the sale of federal property.

The Draft contains the guidelines and tasks for privatisation, forecasts of the impact of privatisation on structural change in the economy, the quantitative characteristics of the property subject to privatisation and forecasts of federal budget revenues.

As of January 1, 2009, the Russian Federation owns the property of 3,765 Federal State Unitary Enterprises. Of that number, the privatisation of about 900 enterprises is restricted under the laws of the Russian Federation; more than 900 enterprises have already been included in the programme for federal property privatisation; about 400 enterprises cannot be privatised due to bankruptcy; more than 400 enterprises are in the process of liquidation, and about 600 enterprises are in the process of reorganisation; other managerial decisions may be made regarding about 200 enterprises which are not currently engaged in any financial or economic activities.

Systemic decisions need to be made regarding the remaining enterprises. These are enterprises which cater to the federal executive bodies or assist in the performance of their functions; those without any significant assets; sanatoria (holiday homes, motels) belonging to federal executive bodies; enterprises whose privatisation, in light of the instructions from the Government of the Russian Federation, is not practicable pending corresponding decisions (geological and forestry enterprises, etc.)

From the results of the analysis of the set of Federal State Unitary Enterprises (FGUPs), the draft does not contain a section on the privatisation of FGUPs. At the same time, about 250 Federal State Unitary Enterprises will be privatised in 2010, including enterprises whose privatisation procedures were initiated in 2009, as well as enterprises being dropped from the list of strategic enterprises in accordance with a decision by the President of the Russian Federation.

Privatisation procedures in 2010 will continue with, above all, enterprises boasting a significant number of immovable property objects, plots of land that need to be marked out and which require not only technical inventory, but also that the rights of the relevant enterprise and the Russian Federation be registered to these plots of land. Belonging to the same group are enterprises subject to inclusion in vertically integrated structures which are to be converted into joint stock companies in accordance with decisions made in 2009.

At the same time, the task of optimising the composition of federal property can be addressed not only through privatisation mechanisms, but also by carrying out liquidation and reorganisation procedures, including the transformation of government-owned enterprises into non-commercial organisations.

In forming the list of joint stock companies whose shares are to be included in the Draft, a comprehensive approach was used that made it possible to adapt the processes of federal property privatisation to the current financial and economic situation, taking into consideration the need to ensure a balance between privatisation as an instrument for increasing federal budget revenues in the context of limited demand and the tasks of improving the structure and composition of the government sector.

The said list was formed in such a way that makes the privatisation programme for 2010 realistic. The Draft includes joint stock companies whose federal shares of stock have never been offered for sale, as well as companies whose sale was put on hold due to temporary adverse market conditions, but which attract investor interest. For the same reason, the Draft includes joint stock companies located in Moscow and the Moscow Region, for which demand from potential investors has traditionally been high, and accordingly, whose chances of being sold are higher.

The Draft also includes joint stock companies whose financial status has been steadily deteriorating. Such property is to be privatised in 2010 to avoid the risk of harming the property interests of the Russian Federation and losing property in the event that the companies go bankrupt.

To reduce the cost of managing government property, the Draft includes joint stock companies which possess an insufficient government stake in their authorised capital to ensure shareholder decisions in the interests of the Russian Federation.

To meet the budget target for revenues from privatisation in 2010, the Draft includes joint stock companies with a relatively high market value (based on earlier evaluation) which can potentially attract investments.

The Draft envisages the privatisation of federal stakes in 461 joint stock companies, as well as 56 objects of real estate which belong to the Treasury of the Russian Federation.

In 2010, blocks of shares will be offered for the privatisation of joint stock companies in the building sector, the agro-industrial sector, the chemical, petrochemical and printing industries, road management, geology, water and air transport, machine-building, etc. (with the exception of strategic joint stock companies).

Based on the assessment of the cost of objects proposed for privatisation, the Federal Budget revenues from the privatisation of federal property in 2010 are estimated at 18 billion roubles.

2. Implementation of the Federal Budget over 9 months of 2009

General parameters of the implementation of the Federal Budget

Over 9 months of 2009 GDP amounted to 28,479.2 billion roubles, which is 8.6% less than in the same period of last year. Consumer prices for goods and services rose by an average 11.0%.

Federal Budget revenue amounted to 5,114.4 billion roubles over 9 months of 2009. During the same period, Federal Budget expenditure  amounted to 6,441.6 billion roubles, and Federal Budget deficit to 1327.2 billion roubles.

I. Federal Budget revenues

Out of the total Federal Budget revenue of 5,114.4 billion roubles, 55.1% came from tax revenues and 44.9% non-tax revenues. The bulk of Federal Budget revenue was formed by the value-added tax (29.4%), customs duties (32.8%), the tax on mineral extraction (13.3%) and the tax on profits of organizations (2.8%).

1. Tax revenues of the Federal Budget over 9 months of 2009 amounted to 2,818.3 billion roubles, i.e. 393.9 billion roubles or 16.2% more than the sum forecast for 9 months of 2009.

Most of the tax revenues of the Federal Budget were provided by the value-added tax (53.4% of the total tax revenue), the tax on mineral extraction (24.1%), the consolidated social tax entered into the Federal Budget (13.3%), the tax on profits of organizations (5.1%), and excise on excisable goods (1.4%).

2. The non-tax revenues of the Federal Budget over 9 months of 2009 amounted to 2,294.9 billion roubles, which is 600.9 billion roubles or 35.5% more than the forecast for 9 months of 2009. In the structure of non-tax revenues, customs duties accounted for 73.1%, and revenues from managing the Reserve Fund and the Sovereign Wealth Fund for 12.2%.

3. Donations and targeted deductions from national lotteries in the first six months of 2009 amounted to 1.2 billion roubles.

II. Federal Budget expenditure

1. The cash expenditure of the Federal Budget in the report period amounted to 6,441.6 billion roubles, or 65.9% of the updated itemized budget for 2009. Over 9 months of 2009, non-interest-bearing expenditure of the Federal Budget amounted to 6,295.2 billion roubles, or 66.0% of the updated itemized budget (over 9 months of 2008, 4,463.2 billion roubles or 60.3% of the updated itemized budget).

The expenditure on priority national projects in the report period amounted to 235.6 billion roubles (62.9% of the updated itemized budget), which can be broken down by projects:

(billion roubles in % of updated itemized budget)

Name of priority national project	9 months of 2009
Healthcare	81.3 (63.7)
Affordable and comfortable housing	136.6 (62.2)
Education	17.7 (64.8)

In addition, 122.2 billion roubles (77.4% of the updated itemized budget) were spent over 9 months of 2009 on the project Government Programme for the Development of Agriculture and Regulation of the Markets of Agricultural Products, Raw Materials and Food for 2008-2012.

III. Government debt as of October 1, 2009 stood at 2,908.9 billion roubles, showing an increase of 216.9 billion roubles compared with January 1, 2009.

As of October 1, 2009, the total size of the Reserve Fund was 2,298.0 billion roubles and the size of the Sovereign Wealth Fund was 2,764.4 billion roubles.

3. Distribution of subsidies to the constituent entities of the Russian Federation in support of measures to balance the budgets of the constituent entities of the Russian Federation

The Federal Law On the Federal Budget for 2009 and for the Planning Period of 2010 and 2011 envisages subsidies in 2009 to support measures to ensure balanced budgets of the constituent entities of the Russian Federation in the total amount of 193.4 billion roubles. As of today, 110.2 billion roubles have been distributed among the constituent entities of the Russian Federation (102.2 billion roubles have been disbursed).

The balance of financial aid to the constituent entities of the Russian Federation that has yet to be distributed by the Government of the Russian Federation is 83.2 billion roubles.

A sum of 58.3 billion roubles is proposed for subsidy distribution under consideration, is to be added to the above subsidies, including:

● 35.2 billion roubles to 63 constituent entities of the Russian Federation based on their budget implementation over 8 months of 2009 in accordance with the criteria for subsidy distribution proposed by the Finance Ministry and approved by the working group on the improvement of inter-budget relations of the Russian Federation (Minutes No.45 of October 22, 2009);

● 12.3 billion roubles to 32 constituent entities of the Russian Federation whose additional revenues in 2010, which resulted from increased rates of certain taxes and state duties, do not cover revenue shortfalls in connection with changed methodologies for calculating the rates on the payment of certain types of excise and additional revenues due to the fact that the Federal Budget has canceled co-financing certain financial commitments of the constituent entities of the Russian Federation;

● 10.8 billion roubles to ten constituent entities of the Russian Federation for financial assistance pursuant to the decisions by the President of the Russian Federation, the Prime Minister of the Russian Federation and the Government of the Russian Federation.

● subsidies are distributed among the constituent entities of the Russian Federation in the amount of 35.2 billion roubles, in proportion to the revenue shortfall, to ensure the expenditure commitments of the constituent entities of the Russian Federation referred to above with due consideration for the actual budget sufficiency level resulting from the implementation of the consolidated budgets of the constituent entities of the Russian Federation for January-August, 2009, and the fulfillment of the measures authorized by the executive bodies of the constituent entities of the Russian Federation aimed at ensuring balanced budgets of the constituent entities of the Russian Federation.

To compensate for the additional budget expenditure of the constituent entities of the Russian Federation that will arise in 2010 in connection with the fact that the Federal Budget canceled co-financing certain expenditure commitments of the constituent entities of the Russian Federation and the changes in tax legislation, it is proposed to render financial assistance in the amount of 12.3 billion roubles to the regions whose budget sufficiency indicator is less than half the average Russian level after the distribution of subsidies aimed at leveling out the budget sufficiency levels of the constituent entities of the Russian Federation in 2010.

Pursuant to the instructions of the President of the Russian Federation, Dmitry Medvedev, the Prime Minister of the Russian Federation, Vladimir Putin, and the Government of the Russian Federation, additional financial assistance in the amount of 10.8 billion roubles is to be rendered to the following constituent entities of the Russian Federation:

- 283.4 million roubles to the Republic of Altai to finance the completion of the construction and launching in 2009 of a secondary school for 640 pupils in the village of Aktash, Ulagansk District, of the Republic of Altai;

- 250 million roubles to the Republic of Buryatia to complete the construction and launch, by January 1, 2010, of a sports complex in block 18 of the city of Ulan Ude and schools in the villages of Altsak, Verkhnaya Zaimka and Mostovka;

- 496.1 million roubles to the Republic of Ingushetia to finance the implementation of Federal Law No.207-FZ of November 24, 2008 On Measures to Organize Local Government in the Republic of Ingushetia and the Chechen Republic, the development of project and cost estimate documentation for projects envisaged under the Federal Targeted Programme Social and Economic Development of the Republic of Ingushetia in 2010-2016, material and technical support of the internal affairs bodies of the Republic of Ingushetia, the purchase of modern diagnostic and clinical equipment for medical and preventative institutions in the Republic of Ingushetia, and compensation of the cost of installing stationary metal detectors at polling stations;

- 1.5 billion roubles to the Republic of Mordovia to compensate for falling budget revenues of the Republic of Mordovia as a result of the re-registration in 2005 of the major tax payer and the termination of activities of oil companies in the Republic;

- 500 million roubles to the Republic of Sakha (Yakutia) for the financial support of measures aimed at developing social infrastructure, demolition of decrepit housing and schools deemed to be unsafe, and prevention of growth of arrears on socially sensitive expenditure items;

- 224.4 million roubles to the Chechen Republic to compensate for the damage caused by the demolition of housing near the Khankala Airport in the city of Grozny in November 2002, and for the financial support of the Federal Law No.207-FZ of November 24, 2008 On Measures to Organize Local Government in the Republic of Ingushetia and the Chechen Republic pertaining to the demarcation of land in the Chechen Republic;

- 388.1 million roubles to the Kamchatka Territory to compensate for the additional budget expenditure resulting from a cut in electricity rates;

- 200 million roubles to the Irkutsk Region to restore the power supply to the Baikal Pulp and Paper Plant;

- 3.7 billion roubles to the Yaroslavl Region to finance measures connected with the Millennium of the City of Yaroslavl celebration in 2010;

- 3.2 billion roubles to the Chukotka Autonomous Area to repay the credit earlier obtained by the Chukotka Autonomous Area as a result of the sale of precious metals from the Government Fund of Precious Metals and Gem Stones of the Russian Federation.

4. Improvement of control and supervision activities and reduction of administrative barriers

Pursuant to instruction No.Pr-964 of the President of the Russian Federation of April 21, 2009, the Prosecutor General's Office of the Russian Federation, jointly with the Control Directorate of the President of the Russian Federation, has reviewed the activities of the executive bodies vested with control and supervisory functions and the power to issue permits. The check has revealed numerous violations of the law of the Russian Federation.

Among the main violations noted were the delegation of certain powers of the federal executive bodies to organisations and economic entities under their jurisdiction; the involvement of commercial structures in performing the functions of federal executive bodies; violation of the Law On Competition; imposition on businesses of paid services in the process of auxiliary procedures and expert inspections; setting monopoly prices for the services of subordinate organisations or organisations "close" to the corresponding agencies; failure to meet deadlines for the issue of permits; preferential treatment of affiliated organisations; duplication of control and permission functions.

Pursuant to the above-mentioned instruction of the President of the Russian Federation, and in view of the results of the study of the materials of the Prosecutor General's Office of the Russian Federation by the Government of the Russian Federation, the Ministry of Economic Development of the Russian Federation  and other federal executive bodies have been given the following instructions:

● to submit proposals on optimising the powers of executive bodies which perform control and supervisory functions and issue permits;

● to analyse the information of the federal executive bodies on progress in remedying the violations revealed during the above checks and report back to the Government of the Russian Federation;

● in addition, pursuant to the Russian President's instruction No.Pr-2197 (clauses 3 and 9) of August 18, 2009 on reducing administrative barriers for small and medium-sized enterprises, the Government of the Russian Federation has instructed the Ministry of Economic Development of the Russian Federation  to draft regulatory legal acts and a set of measures to improve and regulate the activities of federal executive bodies, as well as the procedure for rendering paid services and imposing harsher punishment for unlawful actions.

The Government of the Russian Federation has also instructed that the issue of reducing administrative restrictions on entrepreneurial activities be examined, and that the relevant proposals in the report referred to above be included.

The report contains information on the results of the analysis done by the federal executive bodies of violations revealed by the Prosecutor General's Office of the Russian Federation and on their elimination, as well as proposals on improving government administration, including the optimisation of control and supervisory activities and the reduction of administrative barriers to entrepreneurial activities.

Considering that the above violations are of a systemic character, the Ministry of Economic Development of the Russian Federation believes that a detailed analysis of the current control and supervisory and licensing functions of the executive bodies is necessary, as well as their optimisation and a major revision of outdated legislation.

In this context, the Ministry of Economic Development of the Russian Federation has prepared a plan of priority measures of the Government of the Russian Federation to improve the control and supervisory activities and reduce administrative barriers.

The Ministry of Economic Development of the Russian Federation has also analysed the proposals of federal executive bodies and submitted an aggregate report on the main activities aimed at reducing administrative restrictions on entrepreneurial activities.

In addition, the Ministry of Economic Development of the Russian Federation proposes other measures to further reduce administrative restrictions on entrepreneurial activities, such as the issue of accreditation to certification agencies and the creation of a single national certification agency, the preparation of regulatory legal acts that would rule out requests for information contained in Consolidated State Registers of Legal Entities and Individual Entrepreneurs for a fee, etc.

The draft resolution approves a closed list of paid services rendered by federal executive bodies. The services included in the list are rendered by federal executive bodies, federal institutions or federal state unitary enterprises, and may not be rendered by any other organisations. Such services include, for example, the government examination of project documentation; government examination of the results of engineering studies; government environmental assessment; government assessment of subsoil resources, geological, economic and environmental information on areas of subsoil offered for use.

The draft resolution forbids federal executive bodies, in rendering government services, demanding from citizens and organisations an application for the rendering of paid services not included in the list, as well as documents that are the results of the rendering of paid services not included in the list.

The draft executive order would approve the plan of measures to improve government administration in 2009-2010 in the following areas:

● improvement of control and supervisory and licensing functions;

● improvement of rendering government services and abolition of middleman markets;

● provision of access to information on the activities of government bodies and local government bodies;

● more effective budgetary spending;

● improving civil service and combating corruption.

The above measures envisage a systemic analysis and optimisation of the functions performed by the federal executive bodies (government services) and the introduction of the relevant amendments to the laws of the Russian Federation.

5. Approving a consolidated list of products subject to mandatory certification and a consolidated list of products subject to declaration of compliance

The Draft Resolution of the Government of the Russian Federation on Approving a Consolidated List of Products Subject to Mandatory Certification and a Consolidated List of Products Subject to Declaration of Compliance has been prepared by the Ministry of Industry and Trade of the Russian Federation  pursuant to Clause 3, Article 46 of Federal Law No.184-FZ of December 27, 2002 On Technical Regulation, and the instruction of the Government of the Russian Federation of August 16, 2007 No.SN-P7-4062.

The Government of the Russian Federation has approved the consolidated list of products subject to mandatory certification and the consolidated list of products subject to a declaration of compliance in accordance with clause 3, Article 46 of the Law On Technical Regulation for the transitional period pending the introduction of the corresponding technical regulations.

The adoption of this resolution will make it possible to create a single document instead of regulatory acts of the Government of the Russian Federation and the federal executive bodies establishing the types of products subject to mandatory confirmation of compliance. The document will contain the objects of mandatory confirmation of compliance. This will enable the subjects of entrepreneurial activities, government control (supervision) agencies and other persons concerned to obtain more expeditiously the information on the objects subject to mandatory confirmation of compliance.

By the same token, the Resolution is aimed at eliminating the duplication of the functions of mandatory confirmation of compliance for one and the same type of product.

The products for which technical regulations already exist and the products for which the requirements are established under Article 5 and Clause 2 of Article 1 of the Federal Law On Technical Regulation, as well as products included in the Federal Space Agency nomenclature, are not included in the lists.

Pursuant to the resolution, the Federal Agency on Technical Regulations and Metrology, jointly with the Federal Customs Service and in collaboration with other federal executive bodies concerned, will arrange for the publication of information about the products subject to mandatory confirmation of compliance specifying the regulatory documents which set the requirements and the Codes of the Goods Nomenclature of Foreign Economic Activities.

6. Draft Federal Law On Introducing Amendments to Certain Legislative Acts of the Russian Federation in Connection with the Federal Law On the Federal Budget for 2010 and for the Planning Period of 2011 and 2012

The Draft Federal Law On Introducing Amendments to Certain Legislative Acts of the Russian Federation in Connection with the Federal Law On the Federal Budget for 2010 and for the Planning Period of 2011 and 2012 has been developed to meet the need for the temporary suspension of certain provisions of the budget legislation of the Russian Federation on the use of Federal Budget oil and gas revenues in order to ensure the timely implementation of additional measures to support certain sectors of the Russian economy, the labour market and social services, social security of the population, and to take into account the remarks of the Audit Chamber of the Russian Federation on the text articles of the Draft Federal Law On the Federal Budget for 2010 and the Planning Period of 2011 and 2012.

1. To ensure a balanced Federal Budget, the Draft Law proposes to simultaneously suspend certain provisions of the Budget Code of the Russian Federation on the scale of the use of the Reserve Fund and the Sovereign Wealth Fund, specifically:

1) the formation of oil and gas revenues of the Federal Budget;

2) the formation and use of oil and gas transfer;

3) the size and sources of the formation of the Reserve Fund and the requirement that the Federal law On the Federal Budget establish the scale of the use of the Fund's money;

4) sources of the formation of the Sovereign Wealth Fund;

5) counting the revenues from trust management of the Sovereign Wealth Fund assets towards the increase of the Sovereign Wealth Fund assets transferred into trust management;

6) accounting of the oil and gas revenues of the Federal Budget and transactions with these revenues, reports on their inflow and use, publication of information on their use and entry into the Reserve Fund and the Sovereign Wealth Fund.

Considering that no oil and gas transfer or entry of oil and gas revenues into the Reserve Fund and the Sovereign Wealth Fund are envisaged for 2010-2012, the draft law proposes to suspend the following provisions:

1) on the use of oil and gas revenues of the Federal Budget for the financial support of oil and gas transfer;

2) on introducing at the State Duma the estimate of the use of federal budget oil and gas revenues simultaneously with the draft federal law on the Federal Budget for the next fiscal year and the planning period;

3) on the first reading by the State Duma of the forecast of oil and gas revenues of the Federal Budget and the size of the oil and gas transfer;

4) on taking into account the oil and gas revenues of the Federal Budget and the revenue from the management of the Reserve Fund and the Sovereign Wealth Fund while making amendments to the Federal Law On the Federal Budget for the current fiscal year and the planning period, as well as its consideration and approval;

5) on taking the oil and gas revenues of the Federal Budget and the revenues from the management of the Reserve Fund and the Sovereign Wealth Fund into account in the revenues generated by the fulfillment of the budget in excess of the overall size of revenue approved under the budget law.

Considering that in 2010-2012, oil and gas and non-oil and gas revenues are planned separately, and no oil and gas transfer is to be effected, the draft law stipulates that during the said period the amounts of resources from the Reserve Fund and the Sovereign Wealth Fund used to finance Federal Budget deficit are approved by the Federal Law On the Federal Budget for the next fiscal year and the planning period as part of the sources of financing the Federal Budget deficit.

Amendments are also to be introduced to Federal Law No.63-FZ of April 26, 2007 On Introducing Amendments to the Budget Code of the Russian Federation in the Section On Regulation of the Budget Process and Synchronising Certain Legislative Acts of the Russian Federation with the Budget Legislation of the Russian Federation to postpone the introduction of the provision that determines the size of the oil and gas transfer for the Gross Domestic Product until January 1, 2013.

2. In accordance with the provisions of the draft federal law On the Federal Budget for 2010 and the Planning Period of 2011 and 2012, the Government of the Russian Federation has the right, in 2010, to allocate 195 billion roubles of Federal Budget money to implement additional measures to support sectors of the Russian economy, the labour market and social services, as well as population's social security.

At the same time, the Code envisages the mandatory approval under the Federal Law On the Federal Budget of the cases and procedure for granting Federal Budget subsidies to legal entities.

Thus, the draft law would eliminate the discrepancy between the above norms and suspend certain provisions of the Code until January 1, 2011 in the cases stipulated under federal laws in order to implement additional measures initiated by the Government of the Russian Federation to support sectors of the Russian economy, the labour market and social services and provide population's social security.

3. To ensure the steady performance of debt commitments of the budgets of the constituent entities of the Russian Federation to the Federal Budget, diminish the debt burden and ensure balanced budgets in the regions, the draft law proposes to increase the term of one of the types of budget loans - namely, for the building, reconstruction, capital repair and maintenance of public roads (with the exception of federal highways) - to five years.

4. Pursuant to the remarks of the Audit Chamber of the Russian Federation concerning the text articles of the draft federal law On the Federal Budget for 2010 and the Planning Period of 2011 and 2012, the draft law introduces amendments to the Code and Federal Law No.63-FZ which envisage:

1) granting financial agencies the right to introduce amendments to the approved list of main administrators of the Federal Budget revenue and the list of main administrators of sources of federal budget deficit financing, as well as the revenue identification codes of the budgets of the Russian Federation or classification of the sources of budget deficit financing referred to these administrators. This provision will contribute to the timely transfer of revenues to the budgets of the Russian Federation's budget system.

2) excluding the draft programme for granting budget loans for the next fiscal year (the next fiscal year and the planning period) from the list of documents and materials submitted simultaneously with the draft budget;

3) giving federal institutions outside Russia the right to use the revenues generated in the current fiscal year by legitimate types of activities, as well as the balances of such revenues at the start of the current fiscal year. Federal institutions outside Russia must keep records of the revenues and the use of such revenues specifying the relevant transactions in the reports on Federal Budget implementation.

4) granting the right to the Federal Treasury bodies to open and maintain personal accounts to register the transactions of legal entities (autonomous branches thereof) that are not part of the budgetary process and are financed from the Federal Budget.

5. Pursuant to instructions of the Government of the Russian Federation No.VP-P13-7745 of December 27, 2008, KA-P13-2804 of May 21, 2009 and KA-P13-5844 of October 13, 2009, the Ministry of Economic Development of the Russian Federation, jointly with the federal executive bodies concerned, shall complete the formation of the federal targeted investment programme and introduce the necessary amendments to the procedure for its formation, and develop draft regulatory acts on the preparation and implementation of budget investments in government capital construction projects which are not included in the long-term targeted programmes (Federal Targeted Programmes).

6. The draft federal law On the Federal Budget for 2010 and the planning period of 2011 and 2012 takes into account the Federal Budget revenues from transactions involving the state material values that exceed the budget allocations for the supply of material reserves for the state reserve. The said federal budget revenues may be obtained from the sale of material values which have outlived their shelf life from the state reserve, without replenishing their stocks.

At the same time, Federal Law No.79-FZ of December 29, 1994 On State Material Reserve does not envisage legal grounds that allow the sale of material values from the State Reserve without a simultaneous supply thereof.

In this context, the draft law proposes a provision that would empower the Government of the Russian Federation to make decisions on the sale of material values from the state material reserve that are not part of the required inventory after their shelf life has expired without providing a simultaneous supply for the state material reserve of a matching quantity of similar material values, with the replenishment of such stocks to come in the following years.

7. Draft Federal Law On the Management of Radioactive Waste

The Draft Law has been developed to meet the need for creating and securing terms and mechanisms which would prevent the emergence of further problems in the field of managing radioactive waste (hereinafter RAW) in the Russian Federation and the need to timely address these problems with regard to accumulated RAW stocks.

The Draft Law is aimed at the implementation (in national legislation) of the provisions of the Joint Convention on the Safety of Spent Fuel Management and on the Safety of Radioactive Waste Management ratified by the Russian Federation in 2005.

The aim of the Draft Law is to establish the legal framework for activities in managing already accumulated and newly formed RAW.

The adoption of the law would fill the gaps in the legal regulation of the relations regarding the process of RAW management while creating a legal base synchronised with the universal principles and norms of international law that would make it possible to develop within a uniform legal framework the normative documents and requirements for the methods and conditions of managing RAW and methods for disposal thereof.

The adoption of the law would not require additional outlays from the Federal Budget and budget funds in excess of the funds allocated for the management of RAW under the Federal Targeted Programme of Ensuring Nuclear and Radiation Safety for 2008 and the period through 2015 and other targeted or other programmes that envisage measures pertaining to the management of accumulated RAW.

8. Draft Federal Law On Introducing Amendments to Article 32.7 of the Code of the Russian Federation On Administrative Offenses

The Draft Law has been developed to improve the procedure for calculating the duration of suspension of a special right under Article 32.7 of the Code of the Russian Federation on Administrative Offenses.

Currently, law enforcement authorities experience difficulty determining the beginning date for the period of suspension of a driving license if the person whose license was suspended by a court failed to surrender to the agency enforcing this type of punishment the corresponding license (special permit) or any other documents after the court decision on the suspension of this right come into force.

In accordance with Article 32.7 of the Code, the period of suspension of a special right commences from the effective date of the ruling on administrative punishment in the form of a special right's suspension. The person who has had his/her special right suspended must surrender the corresponding documents to the agency enforcing this type of administrative punishment within three working days from the effective date of the ruling on administrative punishment in the form of suspension of the corresponding special right. Under part 2, Article 32.7 of the Code, in the event the person stripped of a special right fails to surrender the corresponding license (special permit) or other documents, the period of suspension of the special right is discontinued. The period of suspension of the special right begins on the day the person has surrendered the license (special permit) or other documents, or had them seized.

However, some delinquent citizens who have failed to surrender their licenses apply for a duplicate license (special permit) or another document when the suspension period has ended, and claim that the term of suspension has expired (from the effective date of the court ruling) and that they did not fail to surrender their documents, but instead lost them after the protocol on the administrative offense was executed.

The proposed draft law eliminates a gap by adding to the Code a provision that obligates the person whose driver's license was suspended by a court ruling to notify the corresponding agency that enforces the court ruling of any loss of the corresponding license (special permit) or any other document. Otherwise, the period of suspension of the special right will be deemed discontinued.

The adoption of the draft law would contribute to actual compliance with the court ruling on the suspension of a citizen's special right.       

9. Introducing amendments to the Regulations on the Government of the Russian Federation and certain acts of the Government of the Russian Federation

A number of complicated issues that need to be resolved have been revealed in the process of applying the Regulations on the Government of the Russian Federation approved by Government Resolution No.260 of June 1, 2004.

The Draft Resolution of the Government of the Russian Federation proposes the following amendments to resolve the above problems:

- paragraph 1, Clause 60 of the Regulations, whereby draft acts of the Government of the Russian Federation of a normative character are to be submitted to the Ministry of Justice of the Russian Federation for its opinion;

- paragraph 2, Clause 60 of the Regulations, whereby all draft acts that have a bearing on the revenues and expenditure of corresponding budgets are submitted to the Ministry of Finance of the Russian Federation for its opinion. Similar amendments are proposed to paragraph 3, Clause 60 of the Regulations;

- an amendment to Clause 73 of the Regulations would abolish the requirement that decisions on the formation, reorganisation and dissolution of Government commissions and councils only be made by meetings of the Government of the Russian Federation if the said commissions and councils are formed to deal with emergency  issues;

- a new edition is proposed for Clause 108 of the Regulations, whereby a query by a member of the Federation Council or a deputy of the State Duma to the Prime Minister of the Russian Federation or his deputies is sent by the Government Executive Office of the Russian Federation for the preparation of a reply to corresponding federal executive bodies whose heads (or their deputies) are to provide the applicant with a written answer and submit the documents or information requested within no more than 30 days from the date that the application is filed with the Government of the Russian Federation.   

10. Introducing amendments to certain acts of the Government of the Russian Federation

The Draft Resolution charges the Natural Resources Ministry of Russia, Rosprirodnadzor and Rostekhnadzor with additional functions, which under Federal Law No.309-FZ of December 30, 2008 refer to the powers of federal executive bodies in the field of managing waste from the production and consumption and the use of subsoil resources, as well as the assignment of the functions of state control in the field of organisation and operation of federal specially protected natural preserves to the Ministry of Natural Resources and Environment of the Russian Federation in accordance with Government Decree 404 of May 29, 2008.

The Ministry of Natural Resources and Environment of the Russian Federation is to be vested with the functions of approving the procedure for developing and approving the quotas for the generation of waste and the quotas for their disposal, submission and monitoring of reports on the management of waste, development of the procedure for the extraction of ground water by the users of subsoil resources within the boundaries of the mining areas allocated to them for their own needs, and transfer from Rosprirodnadzor the functions of state control of the organisation and operation of specially protected federal natural preserves.

Rosprirodnadzor is to retain the functions of environmental control and monitoring, as well as developing the procedure for control over the handling of waste by facilities subject to federal environmental monitoring.

Rostekhnadzor would retain the functions of supervising and monitoring the management of waste, the issue of permits to create waste storage facilities, organising acceptance and review of reports on the formation, use, neutralisation and placement of waste to be provided by  notification by small and medium-size enterprises.

The assignment to the Ministry of Natural Resources and Environment of the Russian Federation, Rosprirodnadzor and Rostekhnadzor of the above functions would implement the provisions of Federal Law No.309-FZ of December 30, 2008 On Introducing Amendments to Article 16 of the Federal Law On Environmental Protection aimed at simplifying the procedure for reporting on the management of waste and obtaining the right for users of an allocated mining area to extract ground water within the boundaries of the mining areas allocated to them for their own needs.     

11. Introducing amendments to resolution of the Government of the Russian Federation No.609 of October 12, 2005

The Draft Resolution of the Government of the Russian Federation On Introducing Amendments to Resolution of the Government of the Russian Federation No.609 of October 12, 2005, which approves special technical rules On Requirements for Emission of Pollutants by Automobiles Used on the Territory of the Russian Federation, envisages the introduction of multiple amendments to the said technical rules in order to bring it in line with other regulatory legal acts:

1. It provides a more precise definition of terms and brings them in line with the technical regulations on vehicle safety approved by Government Resolution No.720 of September 10, 2009.

2. It provides a more precise definition of the objects of technical regulation. The objects of technical regulation include internal combustion engines for buses and trucks to be installed in vehicles subject to assessment of compliance. It rules out classic car models, vehicles imported by individuals permanently residing in the Russian Federation which they acquired prior to the effective date of the Rules; cars brought into the country by refugees and forced migrants as personal property.

3. The requirements set by the rules are synchronised with the amendments to the Rules of the UN European Economic Commission (of which the Russian Federation is a member) which came into force in 2008 and 2009.

4. The dates for the commencement of the requirements of environmental classes for vehicles which have valid certification documents and are not subject to certification of compliance with environmental safety requirements are synchronised with the amendments to the technical rules On Requirements for Automobile and Aviation Fuel, Diesel and Ship Fuel, Fuel for Jet Engines and Fuel Oil approved by Resolution No.1076 of the Government of the Russian Federation of December 30, 2008.

Under the said technical regulations, in the current edition, the requirements for fuels of environmental class 4 come into force on January 1, 2012 and for ecological class 5 on January 1, 2015.

12. Draft Federal Law On the Ratification of the Agreement Between the Government of the Russian Federation and the Government of Mongolia on the Activities of the Russian-Mongolian Limited Liability Company Mongolrostsvetmet

The Agreement between the Government of the Russian Federation and the Government of Mongolia on the Activities of the Limited Liability Company Mongolrostsvetmet signed in Moscow on April 25, 2007 is one of the key international treaties forming the legal basis for cooperation between the Russian Federation and Mongolia.

The Agreement is aimed at creating a highly efficient production facility by introducing advanced technologies in the extraction and processing of fluorspar, non-ferrous metals and the output of products with greater added value, as well as the shipment of such products to the Russian Federation, Mongolia and other countries.

Under Article 12 of the Agreement, the main product of Mongolrostsvetmet is exempt from customs duties when exported from Mongolia and imported into the Russian Federation, and the same applies to the materials, equipment and other inventory acquired in the Russian Federation exclusively for the core production activities of the company when exported from the Russian Federation and imported into Mongolia.

Exempting the company's products from import customs duties makes the Russian market more attractive for Mongolrostsvetmet Ltd, thus stimulating the growth of supplies to the Russian Federation and the provision of Russian producers with deficit raw materials.  

13. Submitting to the President of the Russian Federation a proposal on the signing of the Treaty On the Customs Code of the Customs Union

The Draft Resolution approves the Draft Treaty on the Customs Code of the Customs Union developed pursuant to the decision to create a legal framework for the Customs Union within EurAsEC adopted by the heads of state of the Russian Federation, the Republic of Belarus and the Republic of Kazakhstan at a meeting of the EurAsEC Intergovernmental Council held in Sochi on August 16, 2006.

The signing of the Treaty meets the need to form the legal framework of the Customs Union within EurAsEC with consideration for the deepening integration between the Russian Federation, the Republic of Belarus and the Republic of Kazakhstan.

14. Signing an agreement between the Government of the Russian Federation and the Government of the French Republic on the temporary work of the citizens of one state on the territory of the other state

The Draft Agreement envisages measures to simplify the stay and temporary employment of citizens:

● for workers of representative offices (branches) who are citizens of the state of one Party, but work in representative offices (branches) of legal entities located in the state of the other Party;

● workers of one group of companies whose enterprises and organisations are located in the state of the Parties;

● workers of enterprises who are citizens of the state of one Party and who manage these enterprises in the state of the other Party;

● highly qualified workers who are citizens of the state of one Party, but have concluded a labour contract with an employer located in the state of the other Party;

● young graduate specialists who are citizens of the state of one Party bound for the state of the other Party to improve their employment prospects under a labour contract concluded with an employer of the state of the other Party;

● citizens of the state of one Party aged between 18 and 30 who wish to visit the state of the other Party for a holiday with the option of temporary employment.

In particular, the Agreement envisages the following preferences for the latter category of citizens:

● with regard to the citizens of the Parties, the lifting of quotas on temporary employment in the states of the Parties;

● abandoning the procedure for discretionary decisions on the practicability of admitting and using foreign workers with regard to the said categories of citizens of Parties, which enables them to work in the host state, except in restricted areas;

● possible extension for a foreign national of the period of subsequent presence for the purpose of work for a term of up to 3 years without leaving the host state;

● the opportunity to obtain medical documents in the state of permanent residence of citizens on the basis of mutual recognition;

● the opportunity of moving within the state of the other Party without migration registration provided the stay in one place does not exceed 10 working days.

In addition, the Draft Agreement lays out the procedure for the stay of the members of the families of the said category of citizens of the state of one Party in the state of the other Party.

The adoption of this draft Agreement, which has no analogues among existing international treaties of the Russian Federation, is the first such document to be signed with a member state of the European Union and will create favourable conditions for investors.      

15. Allocation to the Government of the Chechen Republic of budget money from the Reserve Fund of the Government of the Russian Federation for Emergencies and Disaster Relief for the purpose of mitigating the repercussions of torrential rains in the Chechen Republic in June, 2009

The Draft Executive Order of the Government of the Russian Federation stipulates the allocation to the Government of the Chechen Republic money from the Reserve Fund of the Government of the Russian Federation for Emergencies and Disaster Relief in the amount of 83914.500 roubles to finance urgent relief and restoration work on housing and utilities damaged as a result of torrential rains which hit the Chechen Republic in June, 2009.

Moscow, November 23, 2009