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- Government Procurement
  1. Members requested information on laws, regulations and other measures relating to government procurement in the Russian Federation and on the meaning of "procurement for State needs". Members requested further information on the status of the legislation in this area, in particular, on Federal Law No. 94-FZ of 21 July 2005 "On Placement of Orders for Deliveries of Goods, Performance of Works and Provision of Services for State and Municipal Needs", as last amended on 27 July 2010 (hereafter: Federal Law No. 94-FZ).
  2. The representative of the Russian Federation explained that "procurement for State needs" (the legislation of the Russian Federation did not contain the term "government procurement") was governed in the Russian Federation by: (i) the Civil Code of the Russian Federation; (ii) Federal Law No. 94-FZ, which had entered into force on 1 January 2006; (iii) Federal Law No. 53-FZ of 2 December 1994 "On Procurement and Deliveries of Agricultural Goods, Raw Materials and Foods for the State Needs" (as amended on 2 February 2006); (iv) Federal Law No. 60-FZ of 13 December 1994 "On Procurement of Goods for Federal State Needs", as amended on 24 July 2007 (hereafter: Federal Law No. 60-FZ); and (v) Federal Law No. 213-FZ of 27 December 1995 "On the State Defence Order" (as amended on 1 December 2007). The placement of orders for State and municipal needs could be provided only through the procedures set by Federal Law No. 94-FZ. To provide consistency of all laws, regulations and other requirements relating to procurement for State needs with Federal Law No. 94-FZ, the amendments to the above-mentioned Acts had been made by Federal Law No. 19-FZ of 2 February 2006 "On Amending Certain Legislative Acts of the Russian Federation due to the Adoption of Federal Law No. 94-FZ". When Federal Law No. 94-FZ came into force on 1 January 2006, Federal Law No. 97-FZ of 6 May 1999 was abolished.
  3. The principles and procedures for formation, placement, and fulfilment of orders for procurement (tendering procedures) and delivery of goods and services for State needs were set-out in the above-mentioned Acts. These texts took into consideration international practices in this field. According to Federal Law No. 94-FZ, procurement for State needs was the sphere of Federal regulation, and, as stated in paragraph 2 of Article 65 of that Law, all legal acts would be applied to the extent they did not contradict that Law. The legislation of the Russian Federation in this sphere was aimed at the development of fair competition, providing openness and transparency in the placement of orders, and prevention of corruption and other abuses in the placement of State orders.
  4. Federal Law No. 94-FZ applied to the placement of orders for deliveries of products, performance of works and provision of services for State (at Federal and sub-federal level) and municipal needs, excluding those orders, the amount of which would be lower than the maximum sum of payment in cash under one transaction between legal persons allowed by the Central Bank (in August 2010, this amount was RUB 100,000). Federal Law No. 94-FZ defined "State needs" as the needs of the Russian Federation for goods, works and services necessary for the execution of the functions of the Russian Federation, including the implementation of Federal target programmes, execution of international obligations of the Russian Federation, including implementation of international projects, in which the Russian Federation participated, as well as needs of the subjects of the Russian Federation for goods and services necessary for the execution of the functions of the subjects of the Russian Federation, including the implementation of regional target programmes, which were financed by the Federal budget, budgets of the subjects of the Russian Federation, and off-budget funds of the Russian Federation or of the subjects of the Russian Federation.
  5. Further the representative of the Russian Federation explained that, the Government of the Russian Federation used the instrument of Federal target programmes in cases where a development task in the social or economic sphere needed the efforts of several governmental authorities, both in sense of authority and of resources to be invested in order to achieve the goals. In most cases, the targeted areas were those that lacked private investment and/or suffered from infrastructure constraints. Declaring a target to be covered by a Federal programme did not just permit the allocation of special budget funds, necessary to finance measures addressing this target, but also stimulated State authorities to put specific efforts in that direction, and attracted the private sector to invest in the targeted area with a view to enjoying benefits in the future. Since it was one of the most transparent ways of allocating funds from the Federal budget, target programmes were considered to be an important instrument of long-term economic policy of the State. The most representative programmes of this kind were connected with road-building, housing, development of public education, other social goals (support of education of children or public health care), preservation of historic, cultural and natural monuments, increasing the efficiency of State management (i.e., introducing IT technologies in the State institutions).
  6. The representative of the Russian Federation stated that national treatment would be provided in connection with procurement for State needs, with regard to the placement of orders for procurement of services, or works supplied or performed by foreign suppliers, as well as of foreign goods, if national treatment for the placement of orders was provided in respect of Russian goods, works or services supplied by Russian suppliers, by the respective foreign country.
  7. Pursuant to Article 4.1 of Federal Law No. 94-FZ, State customers could be State authorities of the Russian Federation, State authorities of the subjects of the Russian Federation, local self governmental bodies, as well as budgetary institutions, other recipients of the money from the Federal budget, budgets of the subjects of the Russian Federation or local budgets to place orders at the expense of budget funds. State customers could, on a contractual basis, involve a legal entity exclusively for the execution of the part of the functions of organising and carrying out the procedures for the placement of an order for purchases for State needs. For example, such an entity could provide technical and organizational assistance with carrying out a tender, preparing the tender documentation, publishing the information about the tender, etc. According to Article 6 of Federal Law No. 94-FZ, the State customer would select an entity to provide technical assistance through a placement of order, according to the procedures set-up by that Law. State customers, however, were the actual purchasers and were legally responsible for all aspects of the procurement.
  8. He added, that Federal Law No. 94-FZ provided two ways of placement of orders: (i) through the tender (in the form of competition or auction, including the e-auction); and (ii) without tender (in the form of requests for quotations, from the sole supplier, or at commodity exchanges). The placement of orders with a sole supplier could be implemented only in cases, directly provided by Federal Law No. 94-FZ. Federal Law No. 94-FZ provided that the request for quotations could only take place if: (i) the price of State or municipal order did not exceed RUB 500,000; or (ii) in cases of purchases for providing life support, humanitarian aid or liquidation of the results of emergency situations of natural character or the purchases for providing support for the operation of a customer in the territory of a foreign state, provided that a functioning market for such purchases existed in the territory of that foreign state. Customers or enabled authorities were not able to place orders by requests for quotations for deliveries of like goods, performances of like works and provision of like services, if its amount exceeded RUB 500,000 in a quarter.
  9. Members noted that the scope of government "purchases for State needs", as provided for in current legislation, appeared to go beyond "procurement", as defined in Article III:8 of the GATT 1994 and Article XIII:1 of the GATS, i.e., products and services purchased for governmental purposes and not with a view to commercial re-sale or, with a view, to use in the production of goods for commercial sale, or to use in the supply of services for commercial sale. Purchases for State Needs also appeared to cover more than the goods and services typically subject to the WTO Agreement on Government Procurement. Laws, regulations and other measures relating to purchases that were outside the scope of the definitions in Article III:8 of the GATT 1994, and Article XIII:1 of the GATS, would not be excluded from the coverage of the Agreements in Annex 1 of the Marrakesh Agreement Establishing the World Trade Organization. These Members noted that the Law of the Russian Federation, "Purchases for State Need," appeared to include, in addition to goods for governmental purposes, i.e., direct consumption and support, any products or services needed: (i) by the Government; (ii) to realize government goal-oriented programmes; (iii) to maintain State material reserves; or (iv) for export deliveries to meet international economic commitments, including to honour the currency credits of the Russian Federation. They sought confirmation that, in making purchases that would not be considered as government procurement within the meaning of Article III:8 of the GATT 1994 and Article XIII:1 of the GATS, including national treatment and MFN requirements, would apply and that the Russian Federation would ensure that goods and services purchased for State needs for governmental purposes, would not be re-sold in the commercial sphere or used in the production of goods or the supply of services for commercial sale.
  10. In response, the representative of the Russian Federation stated that Federal Law No. 94-FZ, which replaced Federal Law No. 60-FZ with regard to placement of orders for State and municipal needs, established the definition of State needs mentioned in paragraph . Furthermore, neither Federal Law No. 94-FZ nor other legislation on the purchases for State needs in force contained provisions allowing procurement for State needs to encompass purchases with the aim of commercial re-sale or use in production of goods or the supply of services for commercial sale. Directly engaging in commercial activity did not constitute the function of the State; that was why the definition of the State needs elaborated in Article 3 of Federal Law No. 94-FZ referred to the execution of functions of the State as an aim of the purchases for State needs. Enterprises owned by the State ran their business on their own, and the profit which resulted from such activity was subject to distribution by the enterprises and not by the State. Thus, in his view, the activity of such enterprises did not constitute the activity of the State. With respect to target programmes, the aim of these programmes was to resolve systemic problems in the sphere of State, social and cultural development of the Russian Federation, i.e., to achieve governmental purposes and not to engage in commercial activity.
  11. Members continued to express concerns regarding the role of the State in the commercial sphere in the Russian Federation. The practice of the Government of the Russian Federation of negotiating and concluding contracts for the sale of gas appeared to be an example of where the Government was engaged in "commercial activity". Moreover, Members noted that the Government, as such, was represented on the Board of Directors of many Joint-Stock Companies, and in some companies, exercised special rights as a shareholder through the so-called "golden share". Thus, while engaging in commercial activity might not be defined as a governmental purpose or governmental function, in their view, the Government of the Russian Federation, i.e., the State, did engage in commercial activity.
  12. In response to a Member who asked whether operations of the Federal Agency on the Foods Market Regulation (FFMA) or purchases of the JSC "TVEL" for nuclear power could be considered purchases for State needs, the representative of the Russian Federation said that, as for the operations of the FFMA connected with the organization and performance of State interventions of grain crops and, described in the Section on "State-Trading Enterprises", these operations were not subject to regulations on government procurement within the meaning of Article III:8(a) of the GATT 1994, but were commercial transactions. As for nuclear fuel, the legislation of the Russian Federation did not contain any restriction on the participation of foreign entities in regard to the purchases of TVEL and such purchases were made based on commercial considerations.
  13. The representative of the Russian Federation confirmed that, in respect of procurement of goods and services, including by State-owned and State-controlled enterprises, which were not purchased for governmental purposes, but with a view to commercial re-sale or with a view to use for production of goods and supply of services for commercial sale, such purchases and sales would not be considered to be "government procurement" within the meaning of Article III:8(a) of the GATT 1994 and XIII:1 of the GATS, and thus, the Russian Federation and the competent bodies of the CU would comply with all applicable provisions of the WTO Agreement. The Working Party took note of this commitment.
  14. In response to a request from a Member regarding the involvement of the Russian Federation in barter trade, the representative of the Russian Federation stated that the legal provisions for such trade could be found in Federal Law No. 164-FZ of 8 December 2003 "On the Fundamentals of State Regulation of Foreign Trade Activity", Presidential Decree No. 1209 of 18 August 1996 "On State Regulation of Foreign-trade Barter Transactions" and Government Resolution No. 1300 of 31 October 1996 "On the Measures for State Regulation of Foreign Trade Barter Transactions". In response to a request from a Member for information on whether barter trade was used in the context of purchases of goods or services for State needs, the representative of the Russian Federation stated that, there were no more government-to-government barter Agreements, and special bilateral barter arrangements established in the wake of the August 1998 financial crisis, to provide trade in vital commodities, had lapsed.
  15. In response to questions about transparency in procurement for State needs, the representative of the Russian Federation noted that Federal Law No. 94-FZ contained provisions providing for transparency of procurement of goods and services for State needs. Procurement was mainly carried out by open invitation to tender. Under that Law, notices of invitations to tenders would have to be published 30 days before the opening of the tender in an official publication and on an internet website, both determined by the Government of the Russian Federation, the supreme executive body of the subject of the Russian Federation, or local authorities, respectively. Notices of invitations could also be published, upon decision of the State customer, in English, in other printed mass media with international circulation. Notices of invitations to tenders would have to indicate the form of tender; the name and address of the State customer; the subject of the State contract; the place of delivery of the goods, performance of the work, or supply of the services; the initial (maximum) price of the contract; the procedure, time-limit and place for delivery of the application documents for a tender; criteria of the place, time and date of the evaluation of bids; and, benefits (if such were provided by the State customer) to the penitentiary organizations and organizations of disabled persons. The winner would be determined in accordance with the rules established in that Law. The winner would be notified in writing, within three days after conclusion of the tender, and the results of the tender, including the name of the winner, the subject and the price of the contract, would be published in the official publication and on the official internet website.
  16. According to Article 16 of that Law, all the information concerning procurement was placed on the official website of the Russian Federation, determined by Government Order No. 229-r of 20 February 2006 (www.zakupki.gov.ru). The official website of the Russian Federation contained information on all of the addresses of the official websites of the subjects of the Russian Federation. An official website of a subject of the Russian Federation contained information on all official websites of the municipal units located in the territory of this subject of the Russian Federation. The information was placed on the official websites and accessible free of charge.
  17. Federal Law No. 94-FZ also contained the detailed rules for administrative appeal of actions (inactions) of State customers. Such an appeal was possible to be made until the conclusion of the procurement contract. After such conclusion, disputes would be dealt with by the judicial system.
  18. Some Members asked the Russian Federation to enter into a commitment to become an observer to the WTO Agreement on Government Procurement and to initiate negotiations for the accession to this Agreement upon accession.
  19. The representative of the Russian Federation confirmed the intention of the Russian Federation to join the WTO Agreement on Government Procurement and to notify the Committee on Government Procurement to this effect at the time of accession of the Russian Federation to the WTO and to ensure that from the date of accession, its government agencies would award contracts in a transparent manner according to published laws, regulations and guidelines. He also confirmed that the Russian Federation would request observership in the WTO Agreement on Government Procurement at the time of its accession to the WTO and would initiate negotiations for membership in the WTO Agreement on Government Procurement by tabling an Appendix 1 offer within four years of accession. He confirmed that, if the results of the negotiations were satisfactory to the interests of the Russian Federation and the other Members of the Agreement, the Russian Federation would accede to that Agreement. The Working Party took note of these commitments.
  20. The representative of the Russian Federation confirmed that, from the date of accession, the Russian Federation would ensure that its governmental agencies would place orders for deliveries of goods and supply of services for State needs in a transparent manner, according to published laws, regulations and guidelines. The Working Party took note of this commitment.

- Regulation of Trade in Transit
  1. The representative of the Russian Federation stated that, in his view, the Russian Federation granted freedom of transit through its territory, as prescribed by Article V of the GATT 1994. Article 31 of Federal Law No. 164-FZ of 8 December 2003 "On the Fundamentals of State Regulation of Foreign Trade Activity" (as last amended on 2 February 2006) provided, as a basic principle, for freedom of transit through the territory of the Russian Federation, via routes, whichever were most convenient for international transit, and that no distinction was made which was based on the flag of the vessels, the place of origin, departure, entry, exit or destination, or on any circumstances relating to the ownership of goods, of vessels or of other means of transport. In such a way, freedom for traffic in transit to or from the territory of WTO Members was provided.
  2. He added that the basic principles of these provisions had not been affected by the participation of the Russian Federation in the Customs Union with Kazakhstan and Belarus. Operationally, however, from 1 July 2010, customs control of goods, in transit through the territory of the Russian Federation, was based on the provisions of Chapter 32 of the CU Customs Code. The provisions of the previous Customs Code of the Russian Federation Federal Law No. 61-FZ of 28 May 2003 (as last amended on 24 November 2008) concerning transit control, and other relevant Russian Federal legislation, regulations, and SCC and FSC Orders, continued to apply to the extent they did not conflict with the CU Customs Code. With the adoption of Federal Law No. 311-FZ of 27 November 2010 "On Customs Regulation", the provisions of Chapter 29 of that Law became the principle Russian legislation in this area, elaborating Russian procedures on trade in transit in accordance with the CU Customs Code.
  3. Specifically, Article 215 of the CU Customs Code stated that customs transit was a customs procedure under which foreign goods (i.e., not Russian, Kazakhstani, or Belarusian) were transported: 1) across the CU customs territory under customs custody between the point of their entry into and departure from the CU customs territory (i.e., if transit constituted a part of their itinerary which began and ended outside the boundaries of the CU customs territory); 2) from the point of entry into the CU to a customs point of entry within the CU; 3) from an internal customs point to the point of departure from the CU customs territory; and 4) between two customs entry points within the CU customs territory. In addition, it provided that the customs procedure of customs transit was applied to goods transported by international mail, by pipelines and by power transmission lines. Goods in customs transit were exempted from any customs taxes and duties or application of any economic restrictions or prohibitions, except for: (i) prohibitions applied to the goods listed in sub section 1 of the Common List of Goods that are Subject to Non-Tariff Measures adopted by the CU Commission Decision No. 132 of 27 November 2009 and included in Table 28; (ii) SPS measures described in paragraphs through of this Report; and (iii) prohibitions introduced by the Russian Federation regulations implementing UN Security Council Decisions. Any foreign merchandise could be subject to international customs transit, except goods whose transit was prohibited pursuant to Federal laws, other statutes and legal norms of the CU and the Russian Federation, as stated in paragraph , and other international treaties to which the Russian Federation was a party. However, specific control procedures for goods in transit transported by railway on the territory of the Customs Union were defined by a separate CU Agreement, i.e., the Agreement on the Specificity of Customs Transit of Goods, Transported by Railway on the Customs Territory of the Customs Union signed on 21 May 2010, and in effect since 1 July 2010. Furthermore, as stipulated in Article 215 of the CU Customs Code, customs transit procedure>
  4. Following the request of a Member for further clarification in respect of the legal basis and possible circumstances for placement of goods, exported from one CU Party through the territory of the other CU Party, under the transit procedure, the representative of the Russian Federation explained that the legal instrument that envisaged the right of the CU Commission to introduce such a measure was Article 215 of the CU Customs Code, which directly delegated this right to the CU Commission. He further explained that such measures could be necessary to ensure proper implementation of provisions of the CU legislation that provided for necessity of control over movement of goods within the single customs territory of the CU (for example, to ensure the implementation of unilateral measures introduced by a CU Party, as described in paragraphs and .
  5. He further noted that, pursuant to Article 216 of the CU Customs Code, the placement of goods under the customs procedure of customs transit was allowed, if the following conditions were fulfilled: 1) the import of goods into the customs territory of the Customs Union>
  6. Several Members noted that a sufficient and detailed description of Russian and CU provisions on transit was still required to confirm whether the policies for trade in transit of the Russian Federation were in conformity with WTO provisions, in particular Article V of the GATT 1994. Concerns were raised about SCC Order No. 631 of 2 July 2001 "On the Application of Order of the State Customs Committee of the Russian Federation No. 25 of 15 January 2001", which appeared to provide for measures inconsistent with WTO requirements in this area. In particular, a Member expressed concerns about the practice of the application of specific customs procedures by the Russian authorities in respect of the transport companies of this Member. This Member noted that country-specific restrictive transit procedures were incompatible with WTO provisions, notably Articles I and V of the GATT 1994. This Member requested the Russian Federation to ensure that these and any other country-specific measures of transit procedures would be brought into conformity with WTO requirements upon accession.
  7. In response, the representative of the Russian Federation said that SCC Order No. 631 of 2 July 2001 "On the Application of Order of the State Customs Committee of the Russian Federation No. 25 of 15 January 2001" had been abolished by SCC Order No. 517 of 24 May 2002.
  8. Other Members also asked questions regarding the circumstances under which the Russian Federation might currently impede transit of other countries' exports through its territory; the conditions to require a guarantee of payment of customs duties and taxes; the charges for transit escort and the reasons for their application; and, the provisions for the transit of goods of dual usage. The same Members asked the Russian Federation to ensure that all WTO obligations providing for freedom of transit (and associated disciplines dealing with, for example, fees and charges) would be applied to all products. These Members noted, in particular, concerns with regard to certain transit arrangements for energy products such as oil and gas.
  9. In response to these and other questions from Members on customs escort through the territory of the Russian Federation, the representative of the Russian Federation stated that Article 218 of the CU Customs Code defined customs escort of goods as the escort, by employees of customs authorities or by other organizations, in accordance with the legislation of CU Parties, of the vehicles transporting the merchandise, in accordance with the CU customs transit procedures with the purpose of ensuring the observance of the customs legislation of the Customs Union. Article 217 established the authority of Customs officials at the customs point of departure to apply measures for ensuring the observance of the customs legislation of the Customs Union in customs transit, including a requirement for customs escort, payment of fees for customs support (provided for in Article 130 of the Federal Law "On Customs Regulation"), and/or a guarantee of payment of customs duties and taxes (provided for in Article 86 of the CU Customs Code). Customs officials, when using the system of risk management, could also define or modify the itinerary of the goods in customs transit upon written authorisation of the customs point of departure or of any other customs office, located on route.
  10. Pursuant to Article 218, Customs authorities had the right to put goods in transit under customs escort in the following cases:

- defined on the basis of the risk management system;

- upon non-presentation of guarantee of payment of customs duties and taxes;

- due to repeated non-fulfilment by the transport operator of the operators' obligations in transport of goods in accordance with the customs procedure of customs transit, which was established by the resolutions, entered into legal effect, on imposing administrative penalty for cases of administrative customs law infringement, if at least one of the above-mentioned resolutions has not been fulfilled; and

- due to non-fulfilment by the transport operator of the obligation to pay the customs taxes, duties in accordance with Article 227 of the CU Customs Code.

Further instances justifying the use of customs escort were set-out in Article 87(2) of the Customs Code of the Russian Federation (Federal Law No. 61-FZ), e.g.,

- in case of re-exportation of merchandise delivered to the Russian Federation by mistake or of goods whose importation into the Russian Federation was prohibited, when the place of the actual crossing by such goods of the customs border of the Russian Federation during their exportation did not coincide with the location of the goods;

- when haulage of the goods subjected to the restrictions and prohibitions under the legislation of the Russian Federation on the State regulation of foreign trade activity;

- in case of lack of a customs office located at the place of destination of the goods; and

- if the goods were prohibited from importation or did not have all the requisite permits and licenses required for their transit through the customs territory of the Russian Federation and due to the facts that the permission for domestic customs transit could not be issued, provided that the customs body authorised delivery of the goods to the temporary storage warehouse or other places constituting the customs control zone.

These provisions would continue to apply to the extent they did not conflict with the CU Customs Code.
  1. He confirmed that these were all of the circumstances in which customs escort could be required, and that this list of circumstances could be changed through amendment of the CU Customs Code or establishment of conforming domestic legislation. Customs escort of goods was to be carried out to ensure observance of applicable customs transit procedure. Expenses associated with customs escort had to be fully reimbursed in the form of customs fees levied, in accordance with the Russian legislation on taxes and duties.
  2. Concerning customs clearance and escort fees, he noted that Article 72 of the CU Customs Code authorised their application and the method of their application, currently governed by Article 357 of the Customs Code of the Russian Federation, would be governed by the Federal Law "On Customs Regulation", when that legislation was adopted. Goods placed under the customs transit regime were subject to customs clearance fees, except when the customs unit of departure was the same as the customs unit of destination. In this case, goods placed under the customs transit regime were exempted from customs clearance fees. This was the only exception (see Section on "Fees and Charges for Services Rendered"). As for customs clearance and escort fees, the rates of customs clearance fees were provided in Government Resolution No. 863 of 28 December 2004 and the rates of escort fees in Article 357.10 of the Customs Code of the Russian Federation. Once implemented, the escort fees would be authorised in accordance with Article 130 (in Section 14) of the Federal Law "On Customs Regulation". Escort fees were described in the Section "Fees and Charges for Services Rendered" and listed in Table 20 of this Report. In addition, Chapter 14 of the Federal Law "On Customs Regulation" established a single system of fees for customs clearance procedure for goods crossing the CU customs border. The same customs clearance procedures were applied uniformly for import, export, or customs transit of goods and, therefore, there was a single system of fees for these customs clearance procedures. Notwithstanding the explanations, the matter of the level of fees and how they were established continued to be of concern. Some Members believed that the service rendered in the case of transit was less than that provided in connection with imports going through customs clearance.
  3. In response to a question from a Member, the representative of the Russian Federation explained that guarantees for customs transit were regulated by Articles 85 to 88 of the CU Customs Code. These provisions set-out that guarantees could be required to secure the fulfilment of the customs taxes and duties payable, unless: a) a procedure for transit escort was applied; b) transit was conducted by a Russian authorised customs transport operator or accredited economic operator; or c) customs transit was regulated by the obligations of the Russian Federation under international treaties, inter alia, the International Road Transport (TIR) Convention, that provided otherwise. Transit by power transmission lines, pipelines and railways were also exempt from customs guarantees. The payer had the right to choose the means of guarantees: 1) payment in cash; 2) bank guarantee; 3) surety; 4) pledge of property; or other means foreseen in the national legislation of a CU Party. The representative of the Russian Federation informed Members that Article 88 of the CU Customs Code outlined the rules to assess the value of guarantees and noted that guarantees would be approximated to the value of the customs taxes and duties payable. He further explained that guarantees on customs transit were applied in a transparent and non-discriminatory manner and, in his view, were in line with the requirements of Article V of the GATT 1994 on freedom of transit.
  4. Several Members of the Working Party noted that railway freight fees for transiting the territory of the Russian Federation were higher than those paid for domestic destinations and asked the Russian Federation to provide additional information on this matter. In response, the representative of the Russian Federation said that the Russian Federation was a party to the Agreement on International Transit Tariffs (ITT) and the Agreement on the Single Transit Tariffs (STT). Thus, railway tariff rates for carrying goods in transit were established according to the principles of these international Agreements and calculated on a non-discriminatory basis. Basic ceiling tariffs were calculated on the principles provided for by these Agreements and the Members established applied tariffs below the ceiling calculated annually. The transit tariff rates for same railways/destinations were unique and did not depend on the nationality of goods. Generally, the transit tariff policy was mostly dependent on competitive capacity of international transit routes, crossing several countries, and the rates were established by such countries jointly. These transit tariffs were normally lower than export/import transportation tariffs. The transit tariff policy of the Russian Federation was transparent; all related information was published on the website of the Federal Service on Tariffs of the Russian Federation (www.fstrf.ru) and in related official editions. He also referred to the Section on "Pricing Policies" where tariffs for rail transportation of goods were discussed. Some Members noted that they expected the Russian Federation to provide additional information on principles according to which the tariffs were established and that a further precision/update of the description of the elements, on the basis of which tariffs were set, needed to be done in connection with the railway fee discussion in the Section on "Pricing Policies" of this Report.
  5. One Member noted that it was unclear which agreements were being referenced in paragraph . This Member further noted that this Section of the Report appeared to reference the International Transit Tariff used in cases when a cargo owner paid for the transportation services directly, as well as the "East-West" tariffs for transportation through the Russian Federation to non CIS European countries were determined by the CIS Rail Transport Tariff Conference. The agreements in question were regional arrangements for which the term "international" might be misleading. It would be useful to provide additional references to these agreements to clarify their coverage, countries included, etc. In response, the representative of the Russian Federation stated that the terms and descriptions used in paragraph correctly reflected the official title of the above mentioned Agreements.
  6. When asked about the ban on transit over the territory of the Russian Federation for certain goods, the representative of the Russian Federation stated that, pursuant to Article 152 of the CU Customs Code, transit (as well as importation or exportation) of some types of goods could be prohibited by Federal laws, decisions of the CU Commission, as well as international agreements of the CU Parties and regulations of a CU Party implementing those international agreements. Currently, such prohibitions could be imposed, in accordance with the CU Agreement on Non-tariff Regulation, CU Commission Decision No. 132, and relevant decisions adopted under the Federal laws of the Russian Federation. In general, such provisions were applied for reasons of safety, health, or national security. They could not have an economic character. In particular, transit of goods likely to affect human life and health and, the environment was forbidden or strictly limited. Aircraft carrying armaments, military equipment, and military property were not allowed to transit the territory of the Russian Federation without landing. Import to, export from, and transit of explosives for industrial purposes by juridical persons over the territory of the Russian Federation as part of the accompanied or unaccompanied luggage and hand luggage and their cargo shipment to natural persons' addresses were also prohibited. In addition, special rules applied to the transit of narcotics, substances with psychotropic effects, poisons and substances listed in Tables I and II of the "Convention of the United Nations Organization against Illegal Circulation of Drugs and Psychotropic Substances" of 1988. For example, Article 28 of Federal Law No. 3-FZ of 8 January 1998 "On Narcotic Agents and Psychotropic Substances" prohibited transit of narcotic agents, psychotropic substances and their precursors across the territory of the Russian Federation. In order to implement Federal Law No. 89 FZ of 24 June 1998 "On Production and Consumption of Wastes" (as last amended on 8 December 2008) and commitments of the Russian Federation under the Basel Convention on Control Over Transborder Transportation of Dangerous Wastage and Its Removal, the Government of the Russian Federation issued Resolution No. 442 of 17 July 2003 "On the Transborder Transfer of Wastes", where Appendix 2 contained the list of dangerous wastes, banned to be imported and transited across the territory of the Russian Federation.
  7. The representative of the Russian Federation confirmed that the Russian Federation would apply all its laws, regulations and other measures governing transit of goods (including energy), such as those governing charges for transportation of goods in transit by road, rail and air, as well as other charges and customs fees imposed in connection with transit, including those mentioned in paragraphs  and in conformity with the provisions of Article V of the GATT 1994 and other relevant provisions of the WTO Agreement. The representative of the Russian Federation further confirmed that, from the date of accession, all laws and regulations regarding the application and the level of those charges and customs fees imposed in connection with transit would be published. Further, upon receipt of a written request of a concerned Member, the Russian Federation would provide to that Member information on the revenue collected from customs fees and customs charges, including those mentioned in paragraphs and , and on the costs of providing the associated services. The Working Party took note of this commitment.