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In order to support the Russian sugar beetcomplex during the period of production and processing of the sugar from thedomestic feedstock, the seasonal rates of the duties on the refined and rawsugar were introduced. The licensing was introduced for the import of thesugar, starch treacle, color TV sets, carpets, textile floor covers, tobaccoand its industrial substitutes. The licensing was also introduced for theexport of the certain goods lacking for the domestic processing industry. Thus,for example, the Governmental Act of 31 October 1998, # 1267, introduced, from25 November 1998, the licensing of the export from Russia of the cattle skins,sheepskins, and other untreated skins.
In order to regulate the export fromRussian Federation customs territory of the oil-bearing seeds, the GovernmentalAct of 31 October 1998, # 1268, introduced, from 25 November 1998, thelicensing of the export of the sunflower seeds, rapeseeds, andsoybeans.
In February 1998, the new version of theLaw on Excise Taxes took force and effect. It increased significantly the ratesof the excise taxes: the excise tax on the strong wines and liquors wereincreased 3‑fold; theexcise tax on the expensive imported automobiles with the engine volumeexceeding 2,500 cm3 wasincreased 2‑fold. Theother excise tax rates growth was not so important, i.e., by 10% to 20% inaverage.
In 1998, the work aimed at improving theaccess of the Russian goods to the foreign markets and regulating theanti-dumping procedures. From 1 May 1998, all the quantitative limitation onthe trade in the textile goods between Russia and EC were lifted. Russiaassumed the obligation to issue the licenses on the export of the textile goodsand clothing in accordance with the list, in the automaticcondition.
In the trade with the USA, the anti-dumpingfees on the Russian titanium sponge were lifted from 1 July 1998 (effectivesince 1968). The decision on lifting the "competitiveness threshold" for thearticles of forger titanium and caprolactam articles from Russia was lifted, aswell. The 50% threshold on the export to the USA was lifted for such Russiangoods as certain fish products, plywood, ferro-tungsten, ferro-silico-tungsten,and spare parts for the rolling mills.
The timely actions managed to prevent theopening of the anti-dumping proceedings for the zinc (Republic Korea) and thespring lock washers (USA) and settle, under the conditions acceptable forRussia, the proceedings on the steel, magnesium, ferro-vanadium, and vanadiumnitride in the USA, articles of steel and transformer steel in the EC, I-beamin Republic Korea, reinforcement steel in Egypt. As the result from the effortsof the Russian Trade Mission in Thailand during the anti-dumping investigationsof the supplies of the Russian metal products, the Thailand party made thedecision to consider Russia a country of the market economy (in such event, thelimitations must cover only the products of the relevant suppliers and not thecountry in whole).
Due to the financial crisis, the RussianGovernment had to change radically the foreign trade policy.
To regulate the situation in the currencymarket, the Central Bank, jointly with the State Customs Committee, made thedecision to renew the mandatory sale of the 50% of the hard currency income bythe exporters, this time, not at the Central Bank rate, but at the currencyexchange. However, almost at once, the tendency was seen to the growing failureto delay the inflow of the hard currency income to the accounts of theexporters against the terms declared at the custom clearance of the exportedgoods. Despite the fact that the normative documents of 1992-1993 regulatingthe inflow of the hard currency income to Russia have nor been used these lastyears, they have not been made void, either. Thus, if the exporters fail toplace the hard currency at their accounts in the authorized banks in theRussian Federation territory in the fixed terms, they may have to pay thepenalty of 100% to 200% of the cost of the goods being the direct objects ofthe felony.
In order to stabilize the situation in theconsumer market and reduce the prices on the food and medicaments sold to thepopulation, the Governmental Act of 15 October 1998 has fixed the list of themain foods for which the rate of the value-added tax is reduced from 20% to10%. The Act of the Russian Federation Government of 17 July 1998, # 791, "OnIntroduction of the Additional Import Duty" on the agrarian produce, food, andmedicaments was called off, as well. The Government Act of 21 October 1998,# 1226, reduced the rates of the import duties on the meat, milk, cream inpowder, butter, sunflower oil, baby food, etc.
The sharp drop of the import resulted inthe reduction of the custom duties inflow to the budget. In these conditions,the Government had to return to the practice of levying the duties from theRussian exporters whose incomes began growing after the growth of the US Dollarto Russian Ruble exchange rate.
The Government Act of 4 January 1999, # 17"On Approval of the Rates of the Export Custom Duties on the Goods Exportedfrom the Territory of Russian Federation" introduced the export custom dutieson the waste and scrap of certain non-ferrous metals, including the copper,nickel, aluminum, lead, cobalt, and titanium; the timber of oak, beech, andash; the soybeans, seeds of rape and sunflower; and untreated skins and leatherof skins of the cattle, horses, sheep, and lambs.
The combined export custom duty of 10% ofthe custom cost has been introduced on the on the waste and scrap of thenon-ferrous metals. The lower limits of the duty were fixed on the waste andscrap of the non-ferrous metals: ECU 110 per MT for the copper; ECU 240 for thenickel; ECU 50 for the aluminum; ECU 35 for the lead; ECU 60 for the zinc;ECU 400 for the cobalt; and ECU 75 for the titanium. The export custom duty onthe processed and unprocessed timber will also be 10% of the custom cost, atthe lower limits ECU 10 to 10 per cubic meter in function of the wood (oak,beech, ash).
In order to increase the incomes of theFederal Budget, the Act of the RF Government of 11 January 1999, # 45, fixed,for the six-month term, the following export duties: 5% on the coke andsemi-coke of coal; 5% on the oil and petroleum products excluding the crude oiland petroleum products; Euro 10 per MT on the fuel oil; 5% but not less thanEuro 2 per MT of the natural gas; 5% on the copper and articles of it; and 5%on the nickel and articles of it.
The Act of Government of 23 January 1999,# 83, fixed the export custom duty on the crude oil and crude petroleumproducts, of Euro 2.5 per MT.
The abolition of the export duties in 1996was considered one of the main achievements of the Russian economic reforms andthe important step on the way to the World Trade Organization. However, underthe new conditions, the return to the export duties was less painful for theeconomy than the unsecured issuing of money.
In 1998, just as in the previous years, themechanism of the control over the external economic activity was inconsistentwith the progressive evolutions in the export and import structures. The deepinvolvement of the Russian export in the feedstock makes it dependent upon thechanging conditions of the world market, thus excluding the possibility of itsquick and painless adaptation to its conjuncture. Russia covers almost a halfor its requirements in the food by the import which creates the real threat tothe economic safety of the country. Thus, the necessity to improve themechanism of regulation of the eternal economic activity remainsurgent.
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