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However, since January 1, 2004, there will be imposed new rates of import duties on foreign cars. The Government introduces the procedures imposing single rates of customs duties and taxes with respect to the cars manufactured less than three years ago (i.e. defined as new) and imported by individuals.

The amount of customs duties will be calculated basing on the data on the vehicle price presented by the manufacturer. The ad valorem component of the single rate has been determined proceeding from the rates of duties and taxes used in the trade turnover and makes 48 per cent (100 per cent plus 25 per cent of duty multiplied by 1.18 of VAT). For each value category there is set forth the specific component calculated basing on the data about categories of new vehicles most frequently transferred by individuals across the customs border.

Previously, Russian citizens preferred to purchase used foreign cars, however, the last year this trend was broken. The Russian motor market gradually changes shape as the consumer is ready to pay more for cars of better quality. The increase in the import duties on used cars, improving living standards of Russian citizens, the development of crediting related to purchase of vehicles to the level of effective demand all these factors facilitated a growth in the Russian consumers interest in new foreign and domestically manufactured cars.

Unfortunately, Russian motor factories benefited from the new customs duties less than foreign manufacturers. Although Russian citizens began spending less on older used cars, their demand turned to new cars manufactured abroad.

In 2003, the sales of cars manufactured in Russia increased by only 3 per cent (up to 870 thousand cars), while import of new foreign vehicles increased by 45 per cent (up to 170 thousand cars). At the same time, the production of foreign cars on the territory of Russia grew 5 times (up to 55 thousand). The Russian car manufacturers could somewhat improve their financial standing by adjusting their wholesale Ruble prices to the rates of inflation.

It is expected that already next year, in the case the present rates of growth in the import of vehicles in Russia persist, the Russian market will reach the quantitative and qualitative parameters making it attractive for the top foreign car manufacturers, who may establish their production capacities in Russia. Therefore, basing on the experience of developing countries, an increase in import duties on new foreign vehicles to the prohibitive level might create incentives for foreign large companies to build their own factories in Russia.

At the same time, these duties could protect from imports both traditional domestic manufacturers and newly established motor factories.

The market of sugar still present an urgent problem for the Russian Government. On January 1, 2004, there was introduced a new procedure governing the regulation of import of unrefined sugar in Russia floating duties on unrefined sugar determined on the base of prices registered at the New York exchange.

Before the 15th of each month, the RF Ministry of Economic Development and Trade should submit to the State Customs Committee the data obtained via the monitoring of prices over the preceding month. The RF State Customs Committee should determine the amount of the import duty to be exacted since the 1st of the next month. The higher is the exchange price, the lower is the duty on unrefined sugar. In the case the average monthly price at the New York exchange is below US $ 99.21 per metric ton, the duty should make US $ 270 per metric ton. In the case the price is from US $ 99.22 to US $ 112.44, the duty should make US $ 250; in the case the price is from US $ 112.45 to US $ 125.66, the duty is US $ 235; in the case the price is from US $ 125.67 to US $ 141.1, the duty is US $ 221; in the case the price is from US $ 141.11 to US $ 154.32, the duty is US $ 206; in the case the price is from US $ 154.33 to US $ 167.55, the duty is US $ 194;

in the case the price is from US $ 157.56 to US $ 182.98, the duty is US $ 180; in the case the price is from US $ 182.99 to US $ 198.42, the duty is US $ 164; in the case the price is at US $ 198.43 and above, the duty should make US $ 140 per metric ton. The duty on refined sugar will make US $ 340 per metric ton in 2004.

It is planned to impose the following duties on imported beet sugar: US $ 250 per metric ton in the first six months of 2004 and US $ 270 per metric ton in the last six months of 2004.

At present the import of unrefined sugar is regulated by the tariff quota (3.95 million metric tons). This year the duty on unrefined sugar imported within the quota makes Euro 95 per metric ton, while sugar imported in an excess of the quota is subject to duties at Euro 200 to Euro 230 per metric ton. The quota is distributed via auctions. At present the average wholesale sugar price in Russia makes US $ 410 to US $ per metric ton, what is by US $ 60 to US $ 80 below the cost of unrefined sugar imported within the quota.

N. Volovik N. Leonova Grant financing of Russian science: trends and assessments In November of 2003, in the system of tender based grant financing there occurred an event nicknamed velvet revolution. The RF Government issued its executive order (No. 1708-r of November 26, 2003) dismissing academician M. Alfimov, the Chairman of the Board of the Russian Fund of Fundamental Research (RFFR) from his post before his term in office expired and replacing the academician with a littleknown researcher who in fact was not in any way related to the fundamental science. It should be noted that this change of the chairman was not anticipated both by the members of the RFFR Board, and the funds employees: they all, including the dismissed Chairman, just had to face this fact. The leading scientists, including two Nobel prize laureates, have signed a letter supporting Alfimov, however, it produced no effect16. This event could have been regarded as an accident concerning only the RFFR, if a similar situation did not arise at another state scientific fund the Russian Humanitarian Scientific Fund (RHSF) earlier this year. At RHSF, the managing director, who for some time also held the post of the Deputy Chairman of the Board, had to resign and soon a person little known in the humanitarian academic community was appointed as the Chairman of the Board.

The replacement of the chairpersons of two leading scientific funds of the country is only one manifestation of a rather consistent trend towards a gradual transformation of the mechanism of tender based grant financing based on an independent and objective selection of projects by turning funds in the structures dependent on the government and state agencies. For instance, in 2001 the funds were forced to amend their charters and both RFFR and RHSF became federal agencies subordinated to the government, while the very term grant was practically eliminated from their charters. In 2002 through 2003, there took place the unfruitful discussion about the necessity to adopt special legislation pertaining to state scientific funds confirming their unique status and setting forth the principle methods of their operation, i.e. independency of any particular governmental structure, provision of gratuitous non-repayable targeted financial support in the form of grants via tenders, and set forth the definition of the term grant. It was also envisaged to include in the law stipulations concerning the transfer of the rights for the intellectual property resulting from the work of respective grant recipients in their ownership on the condition of commercial use of such property, as well as procedures governing organization of tenders (differing from those set forth for the state procurement of R&D). There was also discussed the necessity to work out more clearly defined mechanisms of experts rotation and schemes permitting to invite foreign experts in order to render expert findings more objective.

Since at present the Funds are budget organizations, according to the legislation currently in force they can not dispose of the budget resources at their discretion, because they are not included in the structure of the state executive authorities. Both the Moscow State University and the Russian Academy of Science experienced the same problems in 2003 and had to struggle for their independence by seeking financing via special entries in the budget. Both the Moscow State University and the Russian Academy of Science could preserve their status as direct budget recipients by convincing the government that they are symbolic organizations. As concerns the Funds, they could not appeal to their symbolic status, and, therefore, in July of 2003 a special meeting of the Board of the RF Ministry for Industry, Science, and Technologies was convened to decide their fate in spite of the fact that exactly the Funds were symbolic organizations of the post-Soviet science, since they are one of the few new modern mechanisms disposing of budget resources in the most democratic, transparent, and efficient way. The Board took the decision that it was necessary to ensure that the state scientific funds receive the full amount of financial resources set forth for these purposes in the normative acts of the government, and these financial resources should be listed in the budget law for RFFI: kartina maslom // Poisk, No. 49, 5.12.2003, p.3; A.Vaganov. Fundamentalnoi nauke nashli novogo rukovoditelya // Nezavisimaya gazeta - nauka, No. 18, 10.12.2003, p.11.

2004 in the budget entry Fundamental research and promotion of the scientific and technological progress. There was also decided that the Funds should retain their status of direct budget recipients. Although the budget for 2004 confirmed the Funds status as managers of budget resources, the respective standards of financing have not been met for the second year running. The budget law for 2003 allotted to the Funds not 8.5 per cent17 of the expenditures targeted in Section 06 Fundamental research and promotion of the scientific and technological progress as it was stipulated by the legislation, but only 6.9 per cent. According to the budget for 2004, RFFR should be financed at 5.1 per cent of the amount targeted for Section 06 (in stead of 6 per cent), while RHSF will receive 0.84 per cent (in stead of 1 per cent).

Yet last year, the management of the Funds characterized the events described above - transformation of Funds in budget organizations, the delaying of legislative fixation of their special status, decrease in financing of state scientific funds as an offensive against the very concept of tender based grant financing18.

At the same time, it can not be maintained that the funds were inflexible or not ready for a compromise.

For instance, the RFFR management easily agreed to amend the charter and transform the fund in a budget organization, although it clearly understood the dangers associated with the change in the legal and organizational form of the fund. Further, last year RFFR considered the possibility to finance certain initiative projects basing on state priorities, although earlier its position was that the Fund should support only best scientific projects and use the results of grant distribution as the base for determination of new prospective avenues of research similarly to the international practices of drawing maps of science formed on the base of bibliometric analysis.

The Funds are well known in the scientific community, since many researchers could receive additional financing, visit a science conference, subscribe for foreign scientific periodicals, purchase certain equipment or reagents, publish their works. As a matter of fact, the number of programs run by the Funds increased, and they attempted to close a few gaps at once by financing research projects, renewing the material base of scientific organizations, supporting the youth in order to prevent the brain drain. However, it should be noted that since RFFR and RHSF distribute only 7 per cent (in the case the standards of financing are met) of the total budget investment in science, their capacities for financing of each individual initiative is very limited. As a result, it may appear that they fail to complete or effectively support any of the initiatives.

Besides, the Funds should not fully substitute base financing, for instance, they should not renew and support the material base of scientific research and form the informational infrastructure. It is important to maintain the balance between the state financing and management in the sphere of science and self-organization of the scientific community carried out via the Funds.

The combination of hopes pinned on the funds, on one hand, and their limited capacities and deteriorating standing resulting in impossibility to meet the needs of the scientific community, on the other hand, was reflected in the mounting criticism of the Funds in Russia, what was revealed by the results of a survey carried out in 2003.

In the summer and autumn of 2003, IET conducted a mail survey among researchers working in regions of Russia. The results of the survey demonstrated that 80.3 per cent of female researchers and 92.per cent of male researchers approved of the grant system of financing. However, many of those positively evaluating the grant system commented that they approve of this system only in principle while negatively assessing the mechanism of grant financing formed in Russia. It should be taken into account that survey covered not only activities of domestic funds, but also foreign organizations supporting Russian science.

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