FEDERATION TO THE WORLD TRADE ORGANIZATION 5 страница

116. The representative of the Russian Federation confirmed that railway transportation charges on traffic in transit would be in conformity with the provisions of Article V of the GATT 1994 and other relevant provisions of the WTO Agreement. The Working Party took note of this commitment.

117. The representative of the Russian Federation confirmed that regulated railway tariffs for transit of goods and changes to them would be published before their entry into force. The Working Party took note of this commitment.

118. In response to questions from some Members concerning electricity prices, the representative of the Russian Federation noted that such prices were regulated in a similar way as gas prices, pursuant to Federal Law No. 41-FZ of 14 April 1995 "On State Regulation of Tariffs on Electric and Thermal Power in the Russian Federation" (as last amended on 27 July 2010), prices for electrical energy provided by regional electrical power-plants to the regional market were fixed both for industrial consumers and households. He added that the setting of prices of electricity supplied to industrial consumers was being reformed (although, like for gas, electricity prices charged to individual households would remain fixed for reasons of social protection). The concept of the reform aimed at de-monopolization and development of competition in the energy sector had been approved by Government Regulation No. 526 of 11 July 2001 "On Reforming the Electricity Sector in the Russian Federation" (as amended on 1 February 2005).

119. As a result of the reform, it was planned to create in the Russian Federation a competitive electricity energy market through two groups of measures. The first one was aimed at unbundling transportation, dispatching management companies and those engaged in generation, sale and technical maintenance. The part of the latter companies were subject to privatization programmes, while another part, such as companies engaged in transportation and dispatching management activities, remained under governmental control (both in terms of ownership and in terms of price control). The second type of measures was performed with the view to decrease governmental involvement in price control, in respect of those areas of the electricity energy sector where relevant market regulations were applied. This goal had been reached with the launch, in 2003, of the deregulated electricity market. The representative of the Russian Federation informed Members that the amount of electricity sold on the deregulated market, by the end of 2010, had increased to around 80 per cent of electricity sold on the market of the Russian Federation. Conditions of sale of electricity at regulated prices were provided for in Resolution of the Government of the Russian Federation No. 109 of 26 February 2004 "On Establishment of the Price in Respect of Electrical and Heat Energy" and Order of the Federal Service for Tariffs (FST) No. 199-e/6 of 15 September 2006 "On Approval of the Methodological Procedures for Calculation of the Tariffs for Electrical Energy and Power Under Sales Contracts at Regulated Tariffs (Prices) on Wholesale Market". Energy companies and industrial consumers, which could include steel and fertilizer producers, bought such electricity sold at unregulated price.

120. Some Members of the Working Party asked whether gas liquids and condensate, e.g. those used for petrochemical feed stocks, were also included in the list of items under price control. These Members expressed strong concerns about the trade distortions caused by State controls on the pricing of energy for domestic consumption (whether in the form of gas, oil or electricity). The effect of these controls was to depress prices for domestic industrial users, which could lead to a very wide differential between the price paid by domestic industrial users and the price paid by export customers, as well as the world market price. Other Members noted that the price for natural gas was below the full cost of production, including a reasonable profit, and was therefore inconsistent with commercial considerations. Referring to natural gas, these Members considered that the fact that industrial producers of the Russian Federation did not have to pay the full market price for their energy inputs, including gas, especially, in energy-intensive industries and in industries that used gas as an input (rather than an energy source) constituted an unfair competitive advantage. This situation had implications for the ability of imported goods to compete on the market of the Russian Federation and could lead to a displacement of Member products from third country markets. In addition, exports of "downstream" intermediate or finished goods of the Russian Federation, particularly, of products that were energy-intensive, such as fertilizers or metals, could take place at prices below their normal value or at subsidized prices, leading to the possibility of facing anti-dumping or countervailing actions in export markets.

121. The same Members recognised that this was an area where the Russian Federation had begun a process of regulatory reform, which could not be achieved overnight. They understood that the Russian Federation could wish to maintain controls on the price of energy sold for domestic household consumption. Those Members also stressed that increases in the price of natural gas could lead to a return of the non-payment problem. Members considered that the opportunity of WTO accession should be taken to tackle the negative impact of dual pricing in favour of manufacturing industry, at its source. They considered that the regulatory reform in the energy sector would also benefit the wider economy of the Russian Federation by allowing for a more rational resource allocation and stimulating greater investment and competitiveness.

122. Members of the Working Party noted that discussions in the Working Party had served to clarify the pricing of gas. However, these Members remained concerned that the regulated price for gas used by industrial consumers was not fixed at a level that permitted a gas supplier a full and proper recovery of all costs and an amount for profit. According to certain studies of the costs required for production and sustainability of the production of natural gas, domestic regulated prices did not cover the full long-run marginal cost of producing natural gas of Gazprom. They requested a confirmation from the Russian Federation that gas suppliers would act on the basis of commercial considerations, based on full recovery of costs and a reasonable profit.

123. In response to the questions from Members, the representative of the Russian Federation stated that underground resources within the territory of the Russian Federation, including subsoil domain and mineral resources contained therein, energy and other resources, were the property of the State. The Russian Federation exercised its sovereign rights over the resources. He added that the current practice of regulation of energy and natural gas prices in the Russian Federation was not different from similar practices of many WTO Members, who continued to regulate energy prices. Similar to the practice of other countries, energy and natural gas price regulation in the Russian Federation was aimed at prevention of abuse of monopoly position and protection of consumers' interests from monopoly price increases. In response to a question from a Member concerning the amount of gas sold on the deregulated market by the end of 2010, the representative of the Russian Federation explained that such data was not available.

124. Responding to concerns expressed by some Members, the representative of the Russian Federation explained that, in his view, the existing pricing system did not create an unfair competitive advantage, nor a countervailable "specific subsidy" in terms of the WTO Agreement on Subsidies and Countervailing Measures, as this mechanism did not grant any benefit to any enterprise or group of enterprises, or industry or groups thereof or specific sectors since it was equally applied to all sectors. This principle was unambiguously provided for by the legislation of the Russian Federation. In particular, operators engaged in providing services under conditions of natural monopolies were obliged, in accordance with Article 8 of Federal Law No. 147-FZ of 17 August 1995 "On Natural Monopolies" (as last amended on 25 December 2008), to provide services subject to price regulation in accordance with that Law, on non-discriminatory conditions according to the requirements of anti-monopoly legislation. Legal acts establishing the methodology of energy and natural gas price-setting, namely, Resolution of the Government of the Russian Federation No. 1021 of 29 December 2000 "On the State Regulation of Gas Prices and Gas Transportation Services Tariffs on the Territory of the Russian Federation" (as last amended on 23 July 2009) (natural gas) and Order of the FST No. 20-e/2 of 6 August 2004 (as last amended on 31 December 2009), (electric energy), were applied equally throughout the whole territory of the Russian Federation (including remote locations). These Acts did not provide for any industry-specific exceptions, exemptions, discounts or preferences. The representative of the Russian Federation also noted that the methodology for the calculation of gas prices was officially published and transparent. Responding to a specific statement of one Member about the possibility to export "downstream" intermediate or finished goods at subsidized prices, the representative of the Russian Federation raised his objection. In his view, such kind of statement by a Member was misleading since it suggested that the Russian Federation applied export subsidies, which was not the case in respect to any industrial products.

125. In response to a question from a Member regarding the Order of the Federal Energy Commission No. 12/1 of 24 March 1999 "On Granting a 50 per cent Reduction of Prices of Gas to Enterprises which Produce Chemical Fertilizers, Chemical Protection for Plants and Raw Materials for Production thereof, in 1999", the representative of the Russian Federation clarified that it had only been in effect during the year 1999 and that there were no other legal provisions that provided for similar price reductions for any other industries. He further added that Gazprom had an ownership interest in certain Russian fertilizer companies. The regulated price paid by the fertilizer companies, in which Gazprom had an ownership interest, was the same as the price paid by other industrial consumers which purchased similar quantities of gas in like circumstances.

126. Elaborating on the issue of internal price of natural gas, the representative of the Russian Federation stated that the basic principle of price-setting was to ensure economically viable production and recovery of costs, including, inter alia, the cost of production, overheads, financing charges, transportation, maintenance and upgrade of extraction and distribution infrastructure, investment in the exploration and development of new fields done or planned, and reasonable profits.

127. In relation to concerns from Members about the disparity between the price of gas sold to industrial consumers in the Russian Federation and the world price of gas, the representative of the Russian Federation stated that gas export prices were not regulated and were established on the basis of supply and demand in the importing country. He was of the view that there was no "world market price" for gas, and noted that for gas shipped to Europe, costs of shipment and transport reflected a substantial part of the landed price. The representative of the Russian Federation reiterated that the price of gas for internal consumption by industrial consumers in the Russian Federation was fixed at an average level of 80 USD per thousand cubic meters (in 2010) that secured recovery of estimated costs (around 64 USD per thousand cubic meters in 2010) and an amount for profit.

128. The representative of the Russian Federation explained that his Government was guided by the Energy Strategy of the Russian Federation for the period up to the year 2030, which provided for an increase in natural gas prices. He noted that during the last nine years, the gas price had increased from 19.3 USD (in 2001) up to 80 USD (in 2010). The final price for gas could differ depending on the region, since the transportation arm had an impact on the final price levels.

129. Some Members noted that the Government of the Russian Federation had issued Resolution No. 333 of 28 May 2007 "On Improving State Regulation of Gas Prices". These Members requested additional information on the Resolution and the intentions of the Russian Government for implementing this Resolution.

130. In response, the representative of the Russian Federation explained that his Government intended to modify State regulation of gas prices and develop market pricing principles for the domestic gas market, with the objective of benefiting the economy of the Russian Federation. In the Resolution of the Government of the Russian Federation No. 333 of 28 May 2007, the Government of the Russian Federation directed the Federal executive body, responsible for State regulation of prices, to develop a formula which ensured equal return on gas supplies to the international and domestic markets. This formula was used to inform participants in the gas market of the price that would have been applied to gas produced by Gazprom and its affiliates, if the formula had been in effect. The relevant government bodies would submit proposals as to the advisability of implementing State regulation of gas transportation tariffs instead of State regulation of wholesale gas prices and application of the formula to determine wholesale prices for the gas produced by Gazprom and its affiliates under contracts to all consumers (other than the population, i.e., individual households).

131. Members welcomed the steps taken by the Russian Federation towards modifying the regulation of gas prices in the Russian Federation. Such action, in their view, would be beneficial to Gazprom and ensure a stable supply of gas to the domestic and international markets. They encouraged the Russian Federation to move forward in accordance with the Resolution of the Government of the Russian Federation No. 333 of 28 May 2007 to improve the State regulation of gas prices as soon as possible.

132. In response to the concerns expressed, the representative of the Russian Federation stated that upon accession, producers/distributors of natural gas in the Russian Federation would operate, within the relevant regulatory framework, on the basis of normal commercial considerations, based on recovery of costs and profit. He confirmed that the policy of his Government was to ensure, upon accession, that these economic operators, in respect of their supplies to industrial users, would recover their costs (including the cost of production, overheads, financing charges, transportation, maintenance and upgrade of extraction and distribution infrastructure, investment in the exploration and development of new fields) and would be able to make a profit, in the ordinary course of their business. He added that his Government would continue to regulate price supplies to households and other non-commercial users, based on considerations of domestic social policy. The Working Party took note of these commitments.

133. The representative of the Russian Federation confirmed that, from the date of accession, the Russian Federation would apply price controls on products and services contained in Table 7, Table 8 and Table 9 and any similar measures that would be introduced or re-introduced in the future, in a manner consistent with the WTO Agreement. He further confirmed that price control measures on goods would take account of the interests of exporting Members, as provided for in Article III:9 of the GATT 1994. Price control measures would not be used for purposes of affording protection to domestic production of goods, or to impair the service commitments of the Russian Federation. The representative of the Russian Federation also confirmed that the lists of goods and services subject to State price controls in Table 7, Table 8 and Table 9 were comprehensive, and that, from the date of accession, the Russian Federation would publish in the Rossiiyskaya Gazeta notice of any changes in the coverage of goods or services that were subject to price controls. The Working Party took note of these commitments.

COMPETITION POLICY

134. The representative of the Russian Federation stated that his authorities attached great importance to competition policy, and had closely followed the activities of the WTO Working Group on the Interaction between Trade and Competition Policy. The basic goal of competition policy in the Russian Federation was to create a favourable climate for enterprises, and the facilitation of competition and efficient functioning of the markets by preventing, restraining and eliminating monopolistic and anti-competitive practices among economic operators.

135. Legislative framework for realization of competition policy and prevention of anti-competitive practices was set-out in the Federal Law No. 135-FZ of 26 July 2006 "On Protection of Competition" (as last amended on 5 April 2010), the Civil Code of the Russian Federation, the Code on Administrative Offences of the Russian Federation and the Criminal Code of the Russian Federation, which established civil, administrative and criminal liability for infringement of the anti-monopoly legislation.

136. In response to requests from Members of the Working Party for further information, the representative of the Russian Federation stated that any anti-competitive market structure and unfair business practices, including infringement of intellectual property rights, that impeded competition, were subject to this anti-monopoly legislation. In his view, Russian legislation already in force contained all necessary elements for State supervision and control over arrangements and practices of economic operators that adversely affected competition, abuse of dominant position on the market by economic operators and led to economic concentration. In response to the request of some Members of the Working Party, he provided information on the relationship between anti-competitive behaviour and infringement of intellectual property rights in the Section "Trade-Related Intellectual Property Regime" (see paragraphs 1261 and 1289).

137. He further added that the Federal Anti-Monopoly Service (FAS) was the Federal body authorised to carry out the State policy on facilitating development of commodity markets and competition, control over execution of antitrust legislation, as well as prevention and suppression of monopolistic activity, undue competition and other activities restricting competition. The main functions of the FAS were to introduce legislative initiatives in the field of anti-monopoly activity and to investigate and ensure compliance with legislation in the sphere of competition in the commodity markets, defence of competition in the financial services market, activities of subjects of natural monopolies, and advertising. The FAS also reviewed anti-monopoly aspects of establishment and mergers, share transactions and acquisitions. According to the provisions of anti-monopoly legislation and, in order to perform the above-mentioned functions, the FAS could initiate and conduct administrative cases, take decisions and issue prescriptions to participants of business activities that were obligatory for such participants. The action by the FAS could be triggered upon initiative of the FAS or by requests of State bodies or legal and natural persons. He noted that, under Article 71 (g) of the Constitution of the Russian Federation, regional authorities did not have jurisdiction over competition policy.

138. He further noted that the Federal Law No. 135-FZ of 26 July 2006 "On Protection of Competition" concerned the barring of monopoly activity and unfair competition, as well as anti-competitive behaviour, by Federal Executive bodies and governmental bodies of the subjects of the Russian Federation. Violation of the anti-monopoly legislation by officials of the Federal Executive bodies, the Executive bodies of the subjects of the Russian Federation, local governments, and other bodies and organizations, vested with functions of the above-mentioned bodies under the legislation, as well as by natural persons, including individual entrepreneurs, could lead to civil, administrative or criminal liability.

139. In response to questions from Members of the Working Party, he added that Federal Law No. 135-FZ of 26 July 2006 covered also the relations connected with protection of competition and prevention of monopolistic activity and unfair competition, and in which foreign legal persons were participating. In this respect, this Law provided for the similar application of the regulations to Russian and foreign legal persons.

140. In order to eliminate unfair competition, the FAS provided extensive protection of rights to all participants of commodity markets. Most cases of unfair competition uncovered by FAS of the Russian Federation and its regional divisions related to infringement of intellectual property rights and, in particular, to the illegal use of trademarks. Detailed information on the implementation of anti-monopoly legislation and administrative and judicial cases was available on the official website of the anti-monopoly body: www.fas.gov.ru.

141. He added that online information about decisions of the Government in any field, including competition, could be found on the official website of the Government of the Russian Federation (www.government.ru). Information on decisions of the FAS was available on the FAS website (www.fas.gov.ru). Decisions of the Government and FAS, which were issued as normative legal acts, applicable throughout the Russian Federation, were published in official periodicals (see the Section "Transparency" of this Report).

FRAMEWORK FOR MAKING AND ENFORCING POLICIES

POWERS OF EXECUTIVE, LEGISLATIVE AND JUDICIAL

BRANCHES OF GOVERNMENT

142. The representative of the Russian Federation stated that, in accordance with its Constitution, State power in the Russian Federation was exercised by the President of the Russian Federation, the Federal Assembly (the Council of the Federation and the State Duma), the Government of the Russian Federation, and the Courts of the Russian Federation. The competence of each body of power was defined in Chapters 4, 5, 6, and 7 of the Constitution of the Russian Federation, respectively. In response to further questions from Members of the Working Party, he noted that judicial, legislative, and executive power was exercised independently.

143. A system of federal executive bodies had been established by Presidential Decree No. 314 of 9 March 2004 "On the System and Structure of the Federal Executive Bodies" (as last amended on 12 May 2008) in pursuance of ongoing administrative reform. The System introduced Federal ministries, Federal services, and Federal agencies as Federal executive bodies with different spheres of competence. Federal ministries were responsible for determining State policy, preparing legislation in related fields, and coordinating and controlling the activity of Federal services and Federal agencies under their authority. Federal services exercised control and supervision in related fields of activity, performed special functions related to national defence, State security, defence of the State borders of the Russian Federation, fight against crime, and, public safety. Federal agencies rendered State services managing State-owned property, as well as law-enforcement, except functions related to control and supervision.

144. The judicial system of the Russian Federation was regulated by Federal Constitutional Laws No. 1-FKZ of 31 December 1996 "On Judicial System of the Russian Federation" (as last amended on 27 December 2009), No. 1-FKZ of 21 July 1994 "On Constitutional Court of the Russian Federation" (as last amended on 28 December 2010), and No. 1-FKZ of 28 April 1995 "On Courts of Arbitration in the Russian Federation" (as last amended on 30 April 2010). Judicial power was exclusively exercised by courts, manned by judges, juries, and arbitrators duly appointed under constitutional, civil, administrative and criminal court procedures. In accordance with the Federal Constitutional Law "On Judicial System of the Russian Federation", the domestic court system in the Russian Federation consisted of the Constitutional Court of the Russian Federation, Federal Courts of General Jurisdiction, Federal Arbitration Courts and relevant courts in the subjects of the Russian Federation. Judgments, rulings, orders, summons and other lawful communications issued by the courts were binding upon persons, entities or governmental authorities throughout the whole territory of the Russian Federation. Justice was equal for all. Courts were not to favour any agency, person or other complainant based on nationality, sex, race, language, political convictions or any other grounds unless otherwise established by Federal law. Failure to comply with a Russian court judgment, or any other act of contempt of a Russian court, was a breach of Federal law. The rules of civil procedure in Federal courts of general jurisdiction were set-out in the Civil Procedure Code of the Russian Federation No. 138-FZ of 14 November 2002 (as last amended on 6 April 2011). Procedures for the settlement of disputes by arbitration courts were set-out in the Arbitration Procedure Code of the Russian Federation No. 95-FZ of 24 July 2002 (as last amended on 6 April 2011). The representative of the Russian Federation further noted that the State fees for claims or other statements or complaints submitted to the courts of general jurisdiction or to arbitration courts were established in Chapter 25.3 of the Tax Code of the Russian Federation (Federal Law No. 117-FZ of 5 August 2000, as last amended on 7 March 2011). He also added that, in accordance with Law of the Russian Federation No. 2202-1 of 17 January 1992 "On the Public Prosecutor's Office of the Russian Federation" (as last amended on 7 February 2011), the Office of the Public Prosecutor was a single Federal system of authorities responsible for ensuring overall observance of the Constitution of the Russian Federation and all legal acts by federal and regional governments. The representative of the Russian Federation explained that the general authority of the High Courts (the Supreme Court of the Russian Federation and the High Arbitration Court of the Russian Federation) to give guidance to the Courts of the Russian Federation on applying domestic laws was stipulated in the Constitution of the Russian Federation (Articles 126 - 127). High Courts had the authority to issue guiding resolutions on the interpretation and application of the legislation, and that such resolutions had binding force in respect to all lower courts of their respective judicial branch. He further noted that such resolutions could be adopted only by plenary sessions of the Supreme Court or the High Arbitration Court, or by a joint plenary session of those high courts, in contrast to individual judgments pronounced by judicial benches (collegiums) of those High Courts. Responding to questions from Members, he explained that the binding force of the Plenum resolutions of the High Arbitration Court was provided for in Article 13 (2) of the Federal Constitutional Law No. 1-FKZ of 12 April 1995 "On Arbitration Courts", whereas the similar status of the Supreme Court plenary resolutions was established by the Constitutional Law No. 1-FKZ of 31 December 1996 "On Judicial System of the Russian Federation" (as last amended on 27 December 2009) (Article 19). He further explained that the plenary resolutions normally either interpreted an important legislative act or provided guidelines for the decisions of the courts in a specific field of law. He noted that judges were to apply interpretations of the plenary resolutions in all cases involving the subject matter of such resolutions.

145. The President of the Russian Federation was the Head of State. He determined the guidelines of domestic and foreign policies of the State. Pending resolution of a matter by the appropriate court, the President had the right to suspend the operation of acts of the bodies of executive power of the "subjects" <*> of the Russian Federation, if the President believed they were not in compliance with the Constitution of the Russian Federation, Federal laws, and international commitments of the Russian Federation. In response to a question from a Member, the representative of the Russian Federation explained that this authority related only to the bodies of executive power of the subjects of the Russian Federation and not to bodies of executive power of the Federal Government.

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<*> Proceeding from Article 5 (1) of the Constitution of the Russian Federation, the term "subjects" of the Russian Federation includes republics, regions, oblast, and cities of federal importance, autonomous regions and autonomous areas. Article 65 of the Constitution contained the exhaustive list of "subjects" of the Russian Federation.