Table Export Duty Rates for Oil and Oil Products in 2005 2006 (USD per ton) Oil Oil products 2005 light dark 1 February 83.16 March 68.2 36.1 April 102.24 April 81.4 43.1 June 136.27 June 104.1 56.1 August 23 August 106.6 57.1 October 179.29 October 133.5 71.1 December 179.1 February 160.7 March 120.7 1 April 186.6 May 137.9 74.1 June 199.26 June 146.9 79.1 August 216.20 August 158.1 85.1 October 237.5 172.4 92.1 December 180.7 134 72.Source: Decrees of the Government of the Russian Federation RUSSIAN ECONOMY IN trends and outlooks In July 2006 the Federal Law No 145 ÔÇ “On making amendments to the as set 3 of the Law of the Russian Federation “On customs tariff”. The law establishes that the export duty rates both for oil and oil products will be adopted for two cal endar months, but put into effect on the 1st day of the second calendar month, which follows the end of monitoring period, and the resolutions of the Government of the Russian Federation on their introduction should be promulgated no later than 10 days before their implementation. This will enable to synchronize the time of the entry into force of the resolutions on the export duties correction both for crude oil and for oil products.
The mechanism that existed earlier had a considerable drawback of the sig nificant gap in time (20 days) between the period during which new duties rates were calculated and the period in which new rates came into effect. The significant gap in time led to the loss of the additional incomes to the Federal Budget. For in stance, according to the estimations, over May June of 2005 the growth of cus toms rates being USD 2, the losses over just 20 days were equal to approximately USD 6 mln., within January February of 2005 the duties growth rates being USD 17, the losses over 20 days reached USD 60 mln. The entry into the effect of the Law No. 145 ÔÇ will contribute to the raising of additional financial funds to the Federal budget.
In the sphere of the customs and tariffs trade turnover regulation the special attention was given to the making decisions directed to the protection of the do mestic market from the increasing goods import, support for domestic producers, attraction of additional investments to goods production in Russia as well as to the increase of the competitiveness of Goods produced in Russia at the world markets.
The Government of the Russian Federation adopted 44 decrees on the change in the goods nomenclature and customs duties rates.
Thus, with the aim to assist the technical reequipment of the Russian econ omy the Government of the Russian Federation adopted the decree from 24 March 2006 No. 168 “On temporary rates of the import customs duties for some kinds of technological equipment”, according to which the duty free customs regime was introduced for a long list of the technological equipment used in agriculture, medi cal industry, timber industry complex, machine building and other branches of in dustry.
To stimulate further development of motor car construction in the territory of the Russian Federation the duty free import regime for components, used to pro duce units and assemblies of motor transport vehicles was adopted (the decree of the Government of the Russian Federation from 16 September 2006 No 566 “On making amendments to the Customs Tariff of the Russian Federation with regard to the motor vehicles components imported for industrial assemblage”).
In order to fulfill the program on aeroengine SAM146 production for Russian regional aircraft RRJ the export duties rates for utilities and raw materials for aero engines production and technological equipment, used in aviation industry, were called off according to the decree of the Government of the Russian Federation from 26 September 2006 No589 “On temporary import customs rates for utilities and a number of primary goods for aeroengines production”; the decree of the Section The Real Sector Government of the Russian Federation from 22 June “On temporary import cus toms rates for technological equipment for aviation industry”.
In order to protect the economic interests of Russian producers of agricultural products, the Government of the Russian Federation adopted a number of de crees:
- from 17 April 2006 No 214 “On approval of the import customs duty rate for some kinds of native and modified starch”. Implementation of uniform import customs duty rate for all kinds of starch was caused by the necessity to elimi nate unreliable declaration of the goods crossing the border;
- from 25 July 2006 No 456 “On making amendments to the Customs tariff of the Russian Federation with respect to some kinds of cheeses”. This decree intro duced special import duty rates for cheeses for the period of 9 months in order to protect the market of hard cheeses from the increased import of such prod ucts, to increase the domestic output of these goods, to make the competitive conditions equal for domestic producers and importers.
- from 13 August 2006 No 488 “On approval of the import customs duty rate for partially processed fats and oils, margarine products and spreads”. The in crease of the import customs rates for this kind of the product will enable to in crease the volume of the domestic fat and oil production..
To implement paragraph 8 of the Government of the Russian Federation in struction from 11 October 2004 No ÌÔ Ï13 5577 on the decrease of the import duties rates for agriculture raw materials that does not grow in the territory of the Russian Federation, the RF Government adopted a number of decrees, according to which the duty free regime is introduced for not roasted coffee, cacao beans, peanuts (from 13 August 2006 No 487 “On approval of the import customs duties rates for non roasted coffee”, from 13 August 2006 No 486 “On approval of the import customs duties rates for cacao beans, whole or splintered, raw or roasted”, from 13 August 2006 No 489 “On approval of the import customs duties rates for some kinds of peanuts”).
In order to protect Russian goods producers applying trade protection mechanisms – special protective, antidumping or compensatory measures – the investigations were carried out, as a result of which some special protective meas ures were implemented regarding the increased import to the Russian Federation.
On the basis of investigations findings some measures were applied:
- special protective duty regarding the increased import of incandescent lamps from 3 March 2006 for 3 years time (the decree of the Government of the Rus sian Federation from 28 January 2006, No 50);
- antidumping duty for the import of some kinds of steel pipes from the Ukraine from 31 January 2006 for 3 years time (the decree of the Government of the Russian Federation from 29 December 2005, No 824);
- compensatory duty for import of sticks for concrete reinforcement form the Ukraine from 23 January 2006 for 1 year 8 months (the decree of the Govern ment of the Russian Federation from 21 December 2005, No 791).
At present antidumping investigations regarding high carbon ferromanga nese, hardware for machine building, flat cold rolled metal from the Ukraine are RUSSIAN ECONOMY IN trends and outlooks taking place, compensatory investigation into white sugar from the Republic of Bel arus is being carried out.
From 21 December 2006 the protective measures at the market of breeches have been introduced: breeches import with the exception for some countries produc tion is taxed with 8% duty rate. Importers consider this resolution to lead to the mo nopolization of the Russian market, and domestic producers, on the contrary, are of opinion that this will step up the competition.
The special duty is imposed on all the breeches with the diameter from 508 to 1420 mm, excluding those originated in developing countries, which are privileged according to the national system of the Russian Federation. There are 104 such countries all in all (the list, for instance, includes the breech producers from China, Argentina and Mexico).
Last May the Fund for the Development of the Pipes Industry (FDPI) appealed to the Ministry for the Industry and the Energy with a suggestion to introduce the quotas to set a limit for the use of import pipes at the construction of the big pro jects of 30%. In the spring the tariff measures were considered sufficient to protect the market from the import in the Government (according to the Federal Customs Service data from January to October 2006 the import comprised 1.1 mln. tons worth USD 1.2 bln.). It was decided to change the conditions only in November when the decree of the Government of the Russian Federation “On measures of Russian breeches producers protection».
The duties will primarily affect the Ukrainian producers of breeches, whose production will be subjected to the additional customs load. Last December the Ukrainian breeches were subjected to the duty of 8.9%.
The characteristic feature of 2006 was the intensification of the operation of the Federal Supervision Service for Consumer’s Right Protection in the sphere of import supplies regulations to Russia. Thus, from 27 March 2006 the supplies of Georgian and Moldavian wines and wine materials to Russia were limited in accor dance with the resolution of the Federal Supervision Service for Consumer’s Right Protection because of the quality complaints.
In April 2006 the import of Moldavian and Georgian cognacs, wines and spar kling wines was banned. The volume of their supplies to Russia was estimated to be at the level of USD 75 mln. per year. In April the decision was made to ban the im port to the territory of the Russian Federation of the mineral water marks “Borjomi” and “Nabeglavi” from Georgia because they did not meet the quality requirements of the Russian Federation.
During 2006 the Federal Supervision Service for Consumer’s Right Protection implemented the following bans for the import of:
- any agricultural products from Poland due to detected by Federal Supervision Service for the Agriculture mass violations during certificates and customs pa pers registration;
- vegetable products from Holland because the authorities of this country could not provide the Federal Agency for Veterinary and Phytosanitary Supervision products absolute guarantee of safety;
- cane sugar from Belarus, because Belarus was used as a transit country for the duty free import of sugar from other countries;
Section The Real Sector - canned fish from Latvia because of the detected by the Federal Supervision Service for Consumer’s Right Protection exceeding of maximum permissible concentration of benzopyrene in them;
- meat and cattle from Sweden. The ban was accounted for by the Federal Agency for Veterinary and Phytosanitary Supervision because of the danger of the mad cow disease spread;
- meat from the Ukraine;
- cooled fish and seafood from Norway because of the exceeding of cadmium maximum permissible concentration detected by Federal Supervision Service for Consumer’s Right Protection.
In the beginning of 2006 the Government of the Russian Federation again introduced the measures to make the conditions of so called shuttle business operation tougher. From 26 February 2006 the decree of the Government of the Russian Federation No 29, making amendments to the Statute on the implementation of the uniform customs duties rates and taxes in respect to the goods carried across the border by individuals.
Shuttle business started developing in the beginning of the 90ies when it became the main source of income for many citizens, as well as thanks to the possibility of free import of goods worth less than USD 5000 by individuals.
Officially the duties were not imposed only on goods imported for the private use, but this privilege, in fact, opened the channel to the duty free commercial import.
Moreover, at the beginning the shuttle traders, not registering their commercial activity and selling goods at the open aired clothes markets, did not pay any taxes, excluding the fee for the right to sale, coming in the local budgets.
As a result shuttle trade was characterized by an extremely high efficiency level: for a long time the profit rate remained higher than 100% for one trip. This efficiency and the scale of turnover led to the formation of the developed infrastructure around shuttle business, including whole sales markets, tourism and transportation companies in Russia as well as hotels, shops, stocks and plants in Turkey, China and other countries–suppliers, which specialized on Russian clients servicing.
In order to regulate shuttle business and impose real control over it, on December 1993 the Government of the Russian Federation adopted the decree No 1322 “On the regulations of transportation across the customs border of the Rus sian Federation the goods, not intended for any industrial or any other commercial activity, by individuals”. New regulations put normal and shuttle import on a par. In dividuals could bring into the country goods worth up to USD 2,000 duty free. For the goods exceeding this quota the uniform customs rate was introduced of 60% of their customs value.
According to the decree of the Government of the Russian Federation from June 1995 No 553 the uniform rate was decreased by half – down to 30%, however in order to counteract the underdeclaration of the customs value specific duties were introduced (in ECU per item or per kilo). This included clothing and footwear, TV sets, video games and cartridges for them, toys, leather and fur clothes.
In connection with the necessity of compensation for budget losses because of the abolition of the export duties in 1996 the conditions for individuals goods transport RUSSIAN ECONOMY IN trends and outlooks into the territory of the Russian Federation from foreign countries became stricter once again. According to the decree of the Government of the Russian Federation from 18 July 1996 No 808 «On the regulation of transportation across the border of the Russian Federation goods not intended for any industrial or any other commer cial activity by individuals” the norms for the duty free goods transport to the terri tory of the Russian Federation by individuals were decreased from USD 2000 to 1000 on the condition that the total weight of the goods does not exceed 50 kg.
The goods of any commodities group with the worth up to USD 10,000 (no more than 200 kg) were imposed with the customs duties of the uniform rate of 30% of the customs value, not less, however, than 4 ECU per kilo.