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- (i) Sugar
  1. Some Members asked for more detailed information on how the Russian authorities considered that each of the requirements of Articles 1 and 3 of the WTO Agreement on Import Licensing Procedures had been met in relation to non automatic import licensing in the administration of its TRQ for raw sugar (HS 170111).
  2. The representative of the Russian Federation responded that the TRQ on raw sugar (HS 170111) had been eliminated pursuant to the Government Resolution No. 720 of 29 November 2003 and the Government Resolution No. 757 of 18 December 2003 "On the Abolishing of the Licensing of the Import of Raw Sugar to the Russian Federation" had removed raw sugar from the list of products requiring an import licence. He added that pursuant to Government Resolution No. 782 of 17 July 1998 (as amended on 18 December 2003), imports of starch treacle had required licensing. This measure, however, had had a temporary surveillance character, had been taken in order to collect trade data that could be used, if necessary, to justify possible measures aimed at regulating imports, and was abolished since 1 January 2007 by Government Resolution No. 700 of 20 November 2006. At the current time, the Russian Federation does not require import licensing for the importation of raw sugar.

- (ii) Alcoholic beverages and Alcohol-Containing Products
  1. Noting that for alcoholic beverages and alcohol-containing products, import licenses were only issued where the applicant already had an activity licence, some Members requested information on the rationale for this apparent duplicative requirement. They also required information on the number of licenses issued every year and how many of these were currently in force. These Members requested the Russian Federation to make a commitment that any import licenses on ethyl alcohol, alcoholic drinks, alcohol-containing products (as well as on pharmaceutical products, and products with encryption technology, which had a similar system) would be granted automatically on the basis of a regime compatible with WTO requirements, including Article 2 of the WTO Agreement on Import Licensing Procedures.
  2. Some Members expressed concerns about the need for specific licensing requirements for certain types of alcoholic products. Specifically, they asked about the rationale for the mandatory licensing requirement for wines and certain alcoholic beverages exceeding 28 per cent volume, such as vodka and tequila. Members also expressed concerns about disruption in the issuing of these licenses in the course of the change of responsibility within the Government of the Russian Federation for the licenses in question.
  3. In response, the representative of the Russian Federation said that, pursuant to the CU Agreements listed in paragraph , as well as СU Commission Decision No. 132 and the "Regulations of the Order of Import of Ethyl Alcohol and Alcoholic Products to the Customs Territory of the Customs Union", imports of ethyl alcohol, wines, and some alcoholic beverages exceeding 28 per cent volume (vodka and other white distilled alcoholic beverages) as listed in Table 28 were subject to import licensing in the Russian Federation. Licenses were issued by the Ministry of Industry and Trade upon receipt of the documents listed in paragraph of this Report, including a copy of the import contract. In his view, import licensing of alcohol and alcoholic beverages was undertaken for purposes consistent with the requirements of Article XX(b) of the GATT 1994. However, the representative of the Russian Federation confirmed that the non automatic import licensing requirement for alcoholic beverages would be eliminated and replaced upon accession by an automatic licensing procedure whereby licenses would be issued upon submission of the appropriate and complete documentation as described above. At present, fees charged for the issuance of all types of import licence amounted to RUB 2,600. The representative of the Russian Federation noted that according to Order No. 1212 of the Ministry of Industry and Trade of the Russian Federation of 30 December 2009"On the Distribution of Authorities in the Ministry of Industry and Trade of the Russian Federation and its Territorial Bodies for Issuing the Licenses and other Permissive Documents for the Implementation of Export-Import Operations with Particular Types of Goods", vodka was in the list of goods subject to licensing procedures and there were no additional licensing requirements for vodka.

- (iii) Pharmaceuticals
  1. The representative of the Russian Federation noted that the importation of medicines and pharmaceutical ingredients was governed by the CU Agreements listed in paragraph , as well as by Decision No. 132, and more specifically by the "Regulations On the Order of Entry into the Customs Territory of the Customs Union of Medicines and Pharmaceutical Ingredients", as well as relevant domestic legislation, i.e., Government Resolution No. 438 of 17 July 2005 "On the Order of Importation and Exportation from the Russian Federation of Pharmaceuticals for Medical Use" and Federal Law No. 61-FZ of 12 April 2010 "On the Circulation of Medicines". Some Members noted that pharmaceutical licensing requirements were extremely burdensome and constituted a problem for their exporters. A major obstacle was that pharmaceuticals had to be re-registered periodically, e.g., once every four years, and this re-registration>
  2. In response, the representative of the Russian Federation explained that, in his view, import licensing of pharmaceuticals was justified by Article XX(b) of the GATT 1994 and was aimed at implementing the policies of the Government in the field of human and animal life and health protection.
  3. He further explained that, currently, in accordance with the Federal Law No. 61-FZ "On the Circulation of Medicines" of 12 April 2010, and Federal Law No. 128-FZ of 8 August 2001 "On Licensing of Specific Types of Activities" (as amended on 14 July 2008), to import pharmaceuticals into the territory of the Russian Federation, foreign enterprises that were producers or wholesalers could be registered as legal persons on the territory of the Russian Federation (described in paragraph of this Report), and granted a licence for relevant type of activity (pharmaceutical production or distribution), and a licence for importation. The issuance of a licence for pharmaceutical wholesale or production allowed the legal entity to obtain a licence for importation of medicines. The fee charged for the issuance of the licence to import/export medicines amounted to RUB 1,300. He also noted that foreign enterprises were subject to the same uniform procedures as provided under Government Resolution No. 438 of 16 July 2005 "On the Procedure for Importation and Exportation of Medicines for Medical Purposes". In response to a question from Members, regarding future requirements to obtain and present import and/or activity licenses in connection with importation of pharmaceuticals, the representative of the Russian Federation referred Members to paragraph and the requirements and procedures that would apply to pharmaceuticals, alcohol and goods with encryption technology from the date of the accession of the Russian Federation to the WTO. As regards concerns from Members in respect of the periodic re-registration requirement, the representative of the Russian Federation noted that according to the registration procedure of the Ministry of Health and Social Development, the first registration of a pharmaceutical in the territory of the Russian Federation was valid for five years. However, when the registration was renewed there were no restrictions on the duration of validity of that registration and in that case a temporary loss of the licence due to re-registration>
  4. Noting the concerns expressed by Members regarding the treatment of imports when there were differences between the quantity shipped and that listed in the contract, the representative of the Russian Federation explained that the quantity shipped could be smaller than that listed in the contract, but not larger. In the latter case, customs clearance would be refused for the amount exceeding that in the contract.
  5. One Member requested clarification of the requirements for importing products for testing purposes related to obtaining registration and approval for circulation of pharmaceuticals in the Russian Federation. This Member requested information on whether a representative office, for example, could import products into the Russian Federation for such purposes without obtaining an activity licence or import licence.
  6. In response, the representative of the Russian Federation explained that, under the new Law, a product imported into the Russian Federation for testing and examination related to its registration as a pharmaceutical in the Russian Federation was considered to be a non-registered pharmaceutical. In accordance with Government Resolution No. 771 of 29 September 2010 "On the Rules of Importation of Pharmaceutical Products for Medical Use into the Territory of the Russian Federation", the import of certain amounts of non-registered pharmaceuticals, necessary for clinical trials, or with the view of their State Registration, or non-registered pharmaceutical products used for medical treatment of certain patients were allowed under permission of the Ministry of Health and Social Development of the Russian Federation. Thus, a representative office could import such products for testing and examination without obtaining an activity licence or import licence.
  7. Noting further that pharmaceutical exporters had expressed concerns over certain Russian import licensing requirements (for instance, if the molecule unique to the pharmaceutical had not changed, periodic renewal of licenses appeared unnecessary and could be expensive and burdensome to the industry), some Members asked whether such requirements were equally applied to similar domestic products, as the failure to do so could constitute a violation of Article III of the GATT 1994. Noting that some pharmaceutical exporters had expressed concerns that the administration of licenses by the Ministry of Health and Social Development and the Ministry of Industry and Trade did not presently meet WTO requirements, such as transparency, fees for services rendered, processing within a reasonable time-frame and forbearance on minor documentation errors, these Members requested clarification on the steps that the Russian Federation intended to take to ensure that the administration of import licenses would conform to WTO requirements. In this regard, some Members asked the Russian Federation to explain how the 0.05 per cent administrative fee charged by the Ministry of Health and Social Development for issuing permits to import pharmaceutical products was consistent with the requirements of Article VIII of the GATT 1994.
  8. Some Members also requested additional clarification of the status of any legislative initiative in the Russian Federation, which could operate to restrict imports of pharmaceuticals having domestic analogues. These Members felt that, if adopted, such legislation could be inconsistent with the provisions of Articles III and XI of the GATT 1994. Noting further that the Russian Federation had acknowledged that the Law concerning pharmaceuticals (Federal Law No. 86-FZ of 22 June 1998 "On Medicines") was inconsistent with the new Foreign Trade Law and Import/Export Licensing Resolution, some Members expressed their expectation that this Law would be amended or repealed to ensure WTO conformity by the date of accession.
  9. The representative of the Russian Federation replied that the Federal Law No. 86-FZ of 22 June 1998 "On Medicines" had recently been replaced by Law No. 61-FZ of 12 April 2010 "On the Circulation of Medicines". This new Law was intended to achieve WTO compliance. He also added that there were no plans in the Russian Federation to introduce new legislation, which could operate to restrict imports of pharmaceuticals, including veterinary drugs, having domestic substitutes. Activity licences to engage in production or wholesale were made available to all registered companies (domestic or foreign owned) which satisfied government regulatory criteria. For issuance of preliminary permits for imports of pharmaceutical products, the Ministry of Health and Social Development of the Russian Federation (or Rosselkhoznadzor in cases of veterinary drugs) did not now levy any charge or fees. Consultations and preparation of the documents for examination of an application were done by the Federal State Unitary Enterprise "The Information and Methodical Centre on Expertise, Registration and Analysis of the Turnover of Medicines for Medical Purposes" of the Federal Health and Social Development Supervision Service. The cost of the services was determined according to the Civil Code of the Russian Federation on the basis of the volume of performed work as agreed by the parties to the corresponding contract. A preliminary permit issued by the Federal Health and Social Development Supervision Service of the Ministry of Health and Social Development of the Russian Federation or Rosselkhoznadzor in cases of veterinary drugs was the ground for issuing an import licence. He also referred to his explanations under the above Section on "Registration Requirements for Import/Export Operations" of this Report. As regards concerns from Members on conformity of administration of licenses by the Ministry of Health and Social Development of the Russian Federation and the Ministry of Industry and Trade of the Russian Federation with WTO requirements (such as transparency, fees for services rendered, processing within a reasonable time-frame and forbearance on minor documentation errors), the representative of the Russian Federation noted that information on this issue was contained in paragraphs , and of the Section "Government Entities Responsible for Making and Implementing Policies Affecting Foreign Trade; Right of Appeal". Responding to the question of a Member, in respect of differences in application of regulations relevant for implementation of safety and other types of controls in respect of imported and domestic products, he explained that, such differences were caused by the fact that imported goods were subject to controls at the point of customs clearance and domestic goods at production sites, but such differences had not created different burdens for importers and domestic producers and hence, had not caused protection to domestic production. Answering a question by a Member on the consistency of the 0.05 per cent administrative fee, charged by the Ministry of Health and Social Development for issuing permits to import pharmaceutical products, he stated that this fee had been abolished.
  10. Some Members of the Working Party stated that their traders had experienced difficulties with other Ministries or institutions charging extra fees in connection with importation permits based upon the contract value of the goods. These Members requested that the Russian Federation enter into a commitment to eliminate all such non-WTO consistent measures upon its accession to the WTO.

- (iv) Products with Encryption Technology
  1. Some Members requested information on the application by the Russian Federation of requirements for importation of goods containing encryption technology. These Members noted that most countries did not limit imports of these products and questioned the need and justification for licensing, in particular, non-automatic licensing of commercially traded, mass-market goods, and goods that were covered under the Information Technology Agreement (ITA). Members expressed concern that such licensing requirements could nullify or impair the market access commitments on a wide-range of products of undertaken by the Russian Federation. Members stated that, to the extent that the Russian Federation intended to establish or apply licensing requirements, such requirements should apply only to products that clearly presented a threat to security. In such cases, licensing procedures should be applied in a non-discriminatory manner and comply with all WTO requirements.
  2. In response, the representative of the Russian Federation explained that, prior to 1 January 2010, the Russian Federation administered a system of import licensing of all goods, which contained encryption technologies. Since that date, the CU Agreements listed in paragraph and CU Commission Decision No. 132, and the CU Regulation "On the Order of Entry into the Customs Territory of the Customs Union and Removal of the Customs Territory of the Customs Union of Encryption (cryptographic) Means", dated 1 December 2009, and national regulation set-out the requirements for importing goods with encryption technology. He confirmed that any procedures or requirements relating to licensing imports of goods containing encryption technology, whether by the Russian Federation or by the competent bodies of the CU, would be applied on a non-discriminatory basis and in conformity with the relevant provisions of the WTO Agreement, in particular, Articles I and III of the GATT 1994, and that procedures related to the notification, evaluation, approval, and licensing of goods containing encryption technology, would be transparent and predictable and would not impose unreasonable or burdensome requirements on such goods. The Working Party took note of these commitments.
  3. The representative of the Russian Federation explained that, in order to facilitate trade, the Russian Federation would develop and apply an interim system of regulation of goods containing encryption technology. Under this interim system, all encryption products would be divided into three groups: (i) certain goods containing encryption technology could be imported without any formalities related to encryption; (ii) other goods with encryption technology would be subject to a one-time notification requirement; and, (iii) a category of goods with encryption technology would be subject to an expert evaluation and require an import licence. This import licence would be issued by the Ministry of Industry and Trade, based on a "conclusion" issued by the executive body in the field of national security of the CU Party (the Federal Security Service in the Russian Federation), following an "expert examination". He noted that other formalities, such as customs or those necessary to implement technical regulations would continue to apply in respect of imports of all these goods.
  4. In response to a request by one Member to clarify the meaning of the wording "without any formalities related to encryption" in paragraph , the representative of the Russian Federation said that such formalities were understood as the formalities concerning the goods listed in Table 29 and described in the second and subsequent sentences of paragraph , and the formalities listed in paragraph  concerning the goods, which were subject to import licensing and expert evaluation.
  5. In response to the request of the same Member to clarify what "formalities" not related to encryption could be applied to goods with encryption technology, the representative of the Russian Federation noted, that such formalities could relate to the requirements resulting from application of the legislation on customs regulation, technical regulation, intellectual property rights, and other legal acts, which were usually applied with respect to the imported goods or goods designed for internal circulation in the market. He added that all goods with encryption technology (not specially designed or modified for military use) de-controlled by the Wassenaar Arrangement by means of Category 5, Part 2, would be allowed to be imported "without any formalities related to encryption".
  6. The representative of the Russian Federation confirmed that the conditions for importation of goods containing encryption technology, subject to current and any future exemptions, indicated in all of the Notes to Category 5, Part 2 "Information Security" of the Wassenaar Arrangement Dual Use List, whether imposed by the Russian Federation or the competent bodies of the Customs Union, would not be more restrictive than those in effect as of 18 November 2006. In response to a question from a Member, the representative of the Russian Federation added that mobile phones currently legally sold at the retail level in the Russian Federation were included among such goods. The Working Party took note of these commitments.
  7. With respect to goods falling into the categories set-out in Table 29, the representative of the Russian Federation confirmed that, within the framework of the interim system, any restrictions existing before 1 January 2010 would be eliminated and no new restrictions, such as experts evaluations, approvals, and licenses, for the importation of those goods would be adopted or applied, whether by the Russian Federation or the competent bodies of the CU. He further informed Members that within the framework of the interim system, importation of goods in the categories set-out in Table 29 would be permitted based on a one-time submission of a notification. To comply with this requirement, the manufacturer of the good would submit a completed paper copy of a form containing information specified in Table 30. Further, the representative of the Russian Federation confirmed that no licenses would be required, whether by the Russian Federation or by the competent bodies of the CU, for imports into the Russian Federation of goods with encryption technologies, included in Table 29, and the exemptions set-out in paragraph . The Working Party took note of these commitments.
  8. Addressing a request from a Member, he confirmed that all goods with encryption technology released by future Wassenaar Arrangement Category 5, Part 2 "Information Security" de-controls would be allowed to be imported "without any formalities related to encryption". Goods subject to a notification requirement, in accordance with paragraph were listed in Table 29. In accordance to a question from a Member, the representative of the Russian Federation explained that, consistent with Wassenaar practice, the regulating country (the Russian Federation) would determine which goods qualified as "mass market goods", as defined in Table 29. He added that the data to be submitted for a "one-time notification" application were listed in Table 30. He confirmed that, if a good had been imported subject to the "one-time notification" process, that good would not be subject to any other notifications by any parties importing that good. The information on goods approved for import through the "one-time notification" process would be available to the public on the websites of the Federal Security Service.
  9. In response to a question from a Member, the representative of the Russian Federation explained that, if proprietary information was submitted in the notification, and the manufacturer identified that information as proprietary, that information would be protected. Confirmation of notification would be automatic, unless the manufacturer or its authorised representative in the Russian Federation were contacted within ten working days after submission of the notification regarding its compliance with the requirements, including whether the product was correctly subject to notification, as set-out in paragraph . In the Russian Federation, the Federal Security Service would maintain a public internet site where such confirmations would be posted. Any importer or shipper could rely on a relevant confirmation. Once a good>
  10. The representative of the Russian Federation confirmed that goods that had been subject to examination under import procedures related to encryption, prior to the establishment of this interim system, and, which were covered by the categories set-out in Table 29, would be automatically posted on the internet site without making the notification set-out in paragraph . The Working Party took note of these commitments.
  11. For goods containing encryption technology that need an import licence, the representative of the Russian Federation confirmed that, within the framework of an interim system, such goods would need to undergo expert evaluation and approval only once. If an expert evaluator needed additional information for its evaluation, it would be required to notify the manufacturer or his authorised representative in the Russian Federation and request such information within ten working days of the application. Manufacturers would not be obligated to submit source code and failure to submit such code alone, would not result in denial of an application. After the good was approved, the same good, or a good used for the same purpose with identical encryption, could be imported into the Russian Federation with a licence issued in a manner consistent with Article 2 of the WTO Agreement on Import Licensing Procedures. The time period for completing import licensing procedures, including the time required to obtain an experts' evaluation, to receive approval and the import licence, would not exceed three months. Fees for experts' evaluations and licensing would be transparent and based on the costs of services rendered. The Working Party took note of these commitments.
  12. In response to a question from a Member, in respect of the expert evaluation process, i.e., requirements regarding information related to encryption algorithm, the representative of the Russian Federation noted that the information regarding respective requirements was described in paragraph .
  13. The representative of the Russian Federation confirmed that the Russian Federation would engage interested Members in a review of the operation of this interim system. The purpose of this review would be to clarify and refine procedures for notification, confirmation, and licensing of goods with encryption technology and, where possible, to further improve and expand the products covered under paragraph and Table 29. The Working Party took note of these commitments.
  14. In response to a question from a Member about the timing of the review, the representative of the Russian Federation informed that, at the current stage, it>
  15. Members welcomed the information on the regulation of goods containing encryption technology. These Members, however, expressed concerns about how the Russian Federation would ensure that goods not containing encryption technology would be excluded from any requirements relating to importation of goods containing such technology. In their view, goods that did not contain encryption technology should not be subject to any encryption-related requirements or formalities. Further, the Russian Federation should not require an activity licence for the importation of: (i) goods containing encryption technology that were not subject to requirements or formalities related to encryption; and (ii) goods subject only to notification requirements.
  16. The representative of the Russian Federation confirmed that goods that did not contain encryption technology would not be subject to any encryption-related requirements or formalities. He further confirmed that activity licenses would not be required as a condition for importation of goods that were not subject to requirements or formalities related to encryption and goods subject only to notification requirements. The Working Party took note of these commitments.
  17. The representative of the Russian Federation confirmed that, from the date of accession, quantitative restrictions on imports, such as quotas, bans, permits, prior authorization requirements, licensing requirements or other requirements or restrictions having equivalent effect that could not be justified under the provisions of the WTO Agreement would be eliminated and not introduced, re introduced or applied, whether by the Russian Federation or the competent bodies of the CU. From the date of accession, any such requirements or restrictions on imports, whether applied by the Russian Federation or the competent bodies of the CU, would be in conformity with the provisions of the WTO Agreement. He confirmed that the administrative procedures of the Russian Federation for the operation of its import licensing regime and their application would, from the date of accession, be in compliance with all relevant provisions of the WTO Agreement, including the Agreement on Import Licensing Procedures. The Working Party took note of these commitments.