FEDERATION TO THE WORLD TRADE ORGANIZATION 15 страница

414. Referring to the list of VAT exemptions listed in Table 26, some Members noted that a reference was made therein that "sale of products of own manufacture of organizations engaged in the production of agricultural products which generate 70 per cent and more of the overall share of incomes from the sale in the total sum of their incomes" were exempted from VAT. They enquired about the products in question and whether imports of similar products also qualified for exemption and, more generally, how the exemption of domestic agricultural output from VAT could be justified under Article III:2 of the GATT 1994. Noting that fish caught in the high seas by Russian registered vessels were also VAT exempted, these Members further enquired whether this exemption was extended to imported fish products as well. Some Members also enquired whether the provision for VAT exemption for certain agricultural producers, or producers in any other sector, also applied where output was bartered for goods or services or used as payment in kind for discharging financial obligations to financial institutions or other creditors. If that was the case, these Members requested full details on the legal basis for such goods and services being deemed to satisfy the relevant criteria for VAT exemption.

415. The representative of the Russian Federation replied that, in the case of fish caught in the high seas by Russian registered vessels, the VAT collection resulted from the fact that fish so caught were considered to be Russian produced fish and, as such, its delivery into the customs territory of the Russian Federation did not constitute an importation. These goods were thus not subject to VAT when brought to the customs territory of the Russian Federation, but were subject to VAT when the first transaction had been performed.

416. In response to the concerns of Members concerning VAT exemption for agricultural products of some producers, he further explained that under Article 149:3 (20) of the Tax Code of the Russian Federation these products substituted payments for the job of natural persons employed by the producers, if 70 per cent or more of own income of such producers was generated from the sale of the agricultural products of their own manufacture. Such form of payments was used in the agricultural sector by entities in critical situations with no actual money either to pay salaries or VAT when paying for the job of employed persons by agricultural products. This VAT exemption was widely used in the 1990s, but its usage had since declined to negligible levels. The agricultural products at issue were unprocessed products of plant growing and cattle breeding (meat, fish, eggs, vegetables, fruits, etc.). This provision was not applied to the cases when the output of the above-mentioned producers was bartered for goods or services, or used as payment to reimburse financial obligations to financial institutions or other creditors.

417. The representative of the Russian Federation confirmed that the VAT exemption under Article 149:3 (20) of the Tax Code of the Russian Federation exempting certain domestic agricultural products from payment of the VAT would be eliminated as from the date of accession. The Working Party took note of this commitment.

418. Members also noted that discriminatory application of the VAT existed in the automotive sector. Used cars imported by individuals were not charged a VAT or excise tax. They also noted that the VAT was applied on an arbitrary basis on medical equipment, medical devices, and pharmaceuticals. These measures were not in conformity with Article III of the GATT 1994. Some Members also expressed concern about the practice of the customs authorities of the Russian Federation to apply the previously existing VAT rate of 20 per cent (now 18 per cent) to imports of pharmaceutical products instead of the special VAT rate of 10 per cent introduced by the Tax Code and sought confirmation from the Russian Federation that this practice had been abolished. In addition, these Members sought clarification on the application of the maximum VAT on imports of pharmaceutical products for clinical trials rather than the reduced rate provided for by law. In addition to a discriminatory VAT (20 or 18 per cent instead of 10 per cent), which customs tended to apply in the absence of a special permit from the Ministry of Health, these Members stated that the Part II of the Tax Code allowed for exemptions and asked the Russian Federation to consider VAT exemption of these products as they were not for resale.

419. As regards the application of VAT in the automotive sector, the representative of the Russian Federation explained that Government Resolution No. 718 of 29 November 2003 "On the Approval of the Regulations on the Application of the Uniform Rates of the Customs Duties and Taxes with Respect to Goods Transferred across the Customs Border of the Russian Federation by Natural Persons for Personal Use" provided that in respect of imports by natural persons of motor cars into the customs territory of the Russian Federation a single payment could be applied, which accumulated the customs duty, VAT and excise tax. The authority of the Russian Federation in the context of the Customs Union to apply this regime to imports of automobiles by physical persons for their own use had been confirmed by Article 360.4 of the CU Customs Code and by the Agreement on the Order of Transportation of Goods through the Customs Border of the Customs Union by Physical Persons for Personal Purposes and on Performance of Operations, signed on 18 June 2010, as described in paragraph 402 above.

420. He added that the application of the single payment in question was not an option for a natural person who imported a car under the procedure of the release of goods for domestic consumption (i.e., with possibility of resale). In this case, the general order of calculation and payment of customs duties and taxes would be implemented. If a person imported a car for personal use, however, that person had to make a lump-sum payment, the amount of which was to be based on the uniform rate set in the Resolution. The amounts of payments under the two above-mentioned procedures were practically similar, i.e. for the same vehicle the sum of duty, VAT, and excise tax made under the first procedure would be similar to the amount of the payment made in a lump sum under the second procedure.

421. On the application of VAT on pharmaceutical products and medical equipment, as well as products for clinical trials, the representative of the Russian Federation explained that such products had to be registered in the Ministry of Health as pharmaceutical products and medical equipment to be eligible for the reduced VAT rate. The VAT rate was zero per cent for the products included in the exhaustive list of the products of high importance adopted by the Government Resolution No. 19 of 17 January 2002, the list of medical products intended for rehabilitation of invalids adopted by Government Resolution No. 998 of 21 December 2000, the list of medical products intended for production of immunobiological substances adopted by Government Resolution No. 283 of 29 April 2002, the list of spectacle lens and spectacle frames (except for sunglasses) adopted by Government Resolution No. 240 of 28 March 2001, the VAT rate was zero per cent. For other registered pharmaceutical products and medical equipment, as well as products for the clinical trials registered in the Ministry of Health, the VAT rate was 10 per cent. In the absence of such registration, these products were subject to the general VAT rate of 18 per cent. In addition, since 1 January 2008, Articles 164.2 (4) and 164.5 of the Tax Code of the Russian Federation had provided that medical products for clinical studies registered in the Ministry of Health were subject to the reduced excise tax rate of 10 per cent.

422. Some Members of the Working Party noted that space equipment originating in some countries faced, at a minimum, a 20 per cent (now 18 per cent) VAT, while those from other countries enjoyed an exemption from the VAT. They indicated that this was inconsistent with the MFN provisions in Article I of the GATT 1994 and sought the immediate application of equivalent VAT treatment to all space equipment regardless of its country of origin.

423. The representative of the Russian Federation confirmed that there had been some cases of exemptions from levying VAT on space equipment, resulting from bilateral agreements. Since November 2007, the MFN VAT rate applicable to space equipment had been zero per cent, according to Article 164 of the Tax Code (see Table 26).

424. The representative of the Russian Federation confirmed that from the date of accession, the Russian Federation would apply its internal taxes and exemptions thereof, including VAT, excise taxes, and other taxes in a non-discriminatory manner in compliance with Articles I and III of the GATT 1994. In particular, the representative of the Russian Federation confirmed that from the date of accession the Russian Federation would apply VAT for space equipment on an MFN basis. The Working Party took note of this commitment.

Quantitative Import Restrictions, including

Prohibitions and Quotas and Import Licensing Systems

(a) Quantitative Import Restrictions, including Prohibitions and Quotas

425. The legal authorization for the application of quantitative import restrictions in the Russian Federation was contained in agreements established in the Customs Union (CU) with Kazakhstan and Belarus. By Decision No. 19 of 27 November 2009 of the CU Interstate Council, the Agreement on Common Measures of Non-Tariff Regulation in Respect of Third Countries, signed on 25 January 2008 (hereafter: "CU Agreement on Non-Tariff Regulation"), and the Agreement on the Procedure of Introduction and Implementation of Measures, Concerning Foreign Trade in Goods, on the Common Customs Territory in Respect of Third Countries (hereafter: "Agreement on Measures Concerning Foreign Trade"), signed on 9 June 2009 took effect on 1 January 2010. As a consequence, decisions to impose non-tariff measures on third-country imports into the CU would be taken by the CU Commission. Prior to the establishment of the CU, the imposition of non-tariff measures was governed by Chapter 5 of the Federal Law No. 164-FZ. According to the CU Agreement on Non-Tariff Regulation, non-tariff measures could include quantitative restrictions, exclusive import or export licenses, or automatic licenses (permits) or non-automatic licenses. By its Decision No. 132 of 27 November 2009, the CU Commission approved the Common List of Goods that are Subject to Non-Tariff Measures (see Table 28), which also came into force on 1 January 2010.

426. The representative of the Russian Federation noted that, in his view, the Russian Federation did not maintain any quantitative import restrictions, prohibitions or quotas within the meaning of Article XI of the GATT 1994, nor was any such measure in place in the CU. Imports of goods were free of any quantitative restrictions imposed previously pursuant to Article 21 of Federal Law No. 164-FZ of 8 December 2003 "On the Fundamentals of State Regulation of Foreign Trade Activity" (as last amended on 7 April 2010). Under the CU, import restrictions could be applied pursuant to Article 7 of the CU Agreement on Non-Tariff Regulation and in accordance with Federal laws and international treaties of the Russian Federation, if those measures: (i) were necessary to maintain public morals or law and order; (ii) were necessary to protect the life or health of citizens, environment, life or health of animals and plants; (iii) were related to the import or export of gold or silver; (iv) were applied to protect cultural valuables and heritage; (v) were required to prevent the exhaustion of irreplaceable natural resources and implemented simultaneously with curtailment of the domestic production or consumption associated with the utilization of irreplaceable natural resources; (vi) were linked to a limitation of export of domestic raw materials to provide sufficient quantity of such materials for the domestic manufacturing industry in periods when domestic prices for such materials were kept lower than world prices as the result of a stabilization plan implemented by the government; (vii) were essential to acquire or distribute goods in case of their general or local shortage; (viii) were essential to comply with the international obligations; (ix) were essential to ensure the defence of the country and security of the state; and (x) were necessary to ensure the observance of regulatory legal acts not contravening international commitments and related to the application of the customs law, preservation of the environment, protection of intellectual property and other legal acts.

427. In addition, pursuant to Article 3 of the CU Agreement on Non-Tariff Regulation, quantitative import restrictions could be introduced on agricultural or fishery products imported into the CU in accordance with Article XI:2 of the GATT 1994 when such measures were necessary to: (i) reduce the production or sale of similar domestic goods; (ii) reduce the production or sale of domestic goods that could be directly replaced with imported goods unless there was a large-scale production of similar domestic goods; (iii) remove from the market a temporary surplus of similar domestic goods by providing the available surplus of such goods to some groups of consumers either free of charge or at prices inferior to market prices; (iv) remove from the market a temporary surplus of domestic goods that may be directly replaced with imported goods unless there was a large-scale production of similar domestic goods by providing the available surplus of such goods to some groups of consumers either free of charge or at prices inferior to market prices; and (v) limit the production of products of animal origin whose production was dependent upon imported goods, provided the production of similar domestic goods was negligible. In response to a question from a Member, the representative of the Russian Federation explained that "domestic good" in this context meant a good produced in any CU Party.

428. Referring to the statement of the representative of the Russian Federation in paragraph 427, a Member enquired whether any import restrictions under Article XI:2 (c) of the GATT 1994 had been or were being applied. This Member requested the Russian Federation to enter a commitment to comply with Article 4.2 of the WTO Agreement on Agriculture, which had superseded Article XI:2 (c) of the GATT 1994, as from the date of its accession and to remove any measures that could be inconsistent with that Article. In response, the representative of the Russian Federation said no import restrictions under Article XI:2 (c) of the GATT 1994 were being applied under either the existing legislation of the Russian Federation or CU Commission Decisions. He further stated that, from the date of accession, the Russian Federation would comply with Article 4.2 of the WTO Agreement on Agriculture.

429. He further stated that, pursuant to Article 8 of the CU Agreement on Non-Tariff Regulation, the CU Commission was authorised to apply quantitative import restrictions and prohibitions to fulfil the obligations of a Party under international sanctions regimes or to protect the external financial situation and safeguard the balance of payments (see Section on "Balance of payments" of this Report). To meet these obligations, the CU Commission was authorised to apply quantitative import restrictions or grant exclusive licenses to import or export based on proposals from the CU Parties. Such measures would be taken in accordance with the Federal Laws of the Russian Federation and the international Agreements to which the Russian Federation was a Party. In response to a question from a Member, the representative of the Russian Federation explained that the list of general exceptions stipulated in Articles 7 and 8 of the CU Agreement on Non-Tariff Regulation was exhaustive and no other document within the CU provided for such exceptions.

430. The representative of the Russian Federation explained that, as of 1 January 2010, pursuant to Article 9 of the CU Agreement on Non-Tariff Regulation and Article 1 of the Agreement on Measures Concerning Foreign Trade, the authority to impose non-tariff measures in the CU on third-country imports was transferred from the individual Parties to the CU Commission. A proposal to apply a non-tariff measure could be filed by a Party or the CU Commission, and the CU Commission was required to make its determination within 30 days from the date the proposal was submitted, and the decision would come into force within 45 days from the date of publication. Any non-tariff measure was applied to goods originating in third countries, and applied equally to imports from all countries.

431. In response to a question from a Member, the representative of the Russian Federation explained that under Article 9 of the CU Agreement on Non-Tariff Regulation and Article 8 of the Agreement on Measures Concerning Foreign Trade, and pursuant to the procedures set-forth in the latter Agreement, a CU Party could unilaterally impose temporarily a non-tariff measure if such a measure was aimed at: (i) the observance of public morality, law and order; (ii) defence and security; (iii) protection of life or health of the citizens, environment, life or health of animals and plants; (iv) protection of cultural values and cultural heritage; (v) protection of intellectual property; (vi) prevention of the exhaustion of irreplaceable natural resources; (vii) prevention or reduction of the critical shortage in the domestic market of food or other goods that were essential for the domestic market; or (viii) protection of the external financial position and safeguarding the balance of payments. Furthermore, Articles 6.1 and 7.1 of the Agreement on Measures Concerning Foreign Trade provided further grounds to introduce unilateral non-tariff measures with a view to protecting national interests or external financial position as well as safeguarding the balance of payments. Such a unilateral measure could be imposed for only six months. The CU Parties not imposing the non-tariff measure were to take the necessary steps to prevent the importation of the subject goods into the Party which unilaterally applied the non-tariff measure.

432. Noting the statement of the representative of the Russian Federation that measures applied on the basis of Article 7 of the CU Agreement on Non-Tariff Regulation were justifiable under Articles XX and XXI of the GATT 1994 and other respective provisions of the WTO Agreement, some Members stated that certain elements of that Article, such as paragraph 6, reached beyond grounds provided for under the GATT, in particular Articles XX and XI. The same Members requested a commitment that Article 7 of the CU Agreement on Non-Tariff Regulation, whether applied by the Russian Federation or the competent bodies of the CU, would be in conformity with the relevant provisions of the WTO Agreement.

433. In response, the representative of the Russian Federation stated that, in his view, Article 7 of the CU Agreement on Non-Tariff Regulation was in conformity with Article XX (j) of the GATT 1994. He also confirmed that measures applied on the basis of Article 7 of the CU Agreement on Non-Tariff Regulation would be in conformity with the relevant provisions of the WTO Agreement, whether applied by the Russian Federation or the competent bodies of the CU.

434. In response to a question from a Member, the representative of the Russian Federation recalled that the temporary ban on the importation of ethyl alcohol enforced under Federal Law No. 61-FZ of 31 March 1999 "On Temporary Ban on Ethyl Alcohol Imports" had been terminated on 31 December 2001. He further said, that Article 13 of Federal Law No. 171-FZ of 22 November 1995 "On State Regulation of Producing and Turnover of Ethyl Alcohol, Alcoholic and Alcohol-Containing Products", which had restricted imports of distilled spirits to no more than 10 per cent of alcohol sales in the Russian Federation, was repealed on 1 January 2006 by Federal Law No. 102-FZ of 21 July 2005 "On Amending the Federal Law on the State Regulation of Producing and Turnover of Ethyl Alcohol, Alcoholic Products and Alcohol-Containing Products and on Declaring as no Longer Valid Some Provisions of the Federal Law on the State Regulation of Producing and Turnover of Ethyl Alcohol, Alcoholic Products and Alcohol-Containing Products".

435. Noting the statement of the representative of the Russian Federation concerning the lifting of the temporary ban on imports of ethyl alcohol, some Members requested clarification of whether the Russian authorities considered that imports of ethyl alcohol could still be affected by Government Resolution No. 1292 of 3 November 1998 "On the Approval of Rules for the Issuance of Quotas for the Manufacture of Ethyl Alcohol from All Types of Raw Materials and Special Permits for Its Delivery" (as amended on 16 May 2001). As this Resolution seemed to contemplate placing quotas on deliveries by domestic producers, the question remained as to whether the Russian Federation eventually planned to place quotas on imports.

436. In response, the representative of the Russian Federation stated that the rules of putting quotas on production of ethyl alcohol from all types of raw materials, methylated spirits and alcohol-containing solutions had been recognised as invalid by Resolution of the Supreme Court of the Russian Federation No. GKPI 2001-783 of 16 May 2001 "On Recognition as Invalid and Inapplicable the Rules on Putting Quotas on Production of Ethyl Alcohol and Alcohol-Containing Solution", approved by Government Resolution No. 1292 of 3 November 1998. The rules of issuance of special permits for delivery (release) of ethyl alcohol produced from all types of raw materials, methylated spirits and alcohol-containing solutions had been recognised as invalid and inapplicable by Resolution of the Supreme Court No. GKPI 00-1251 of 23 November 2000 "On Recognition as Invalid and Inapplicable the Rules of Issuance of Special Permits for Delivery (Release) of Ethyl Alcohol Produced from All Types of Raw Materials, Methylated Spirits and Alcohol-Containing Solutions", approved by the Resolution of the Government of the Russian Federation No. 1292 of 3 November 1998.

437. He further noted that according to Federal Law No. 102-FZ of 21 July 2005 "On Amending the Federal Law on the State Regulation of Production and Circulation of Ethyl Alcohol, Alcoholic Products and Alcohol-Containing Products and on Declaring as no Longer Valid Some Provisions of the Federal Law on the State Regulation of Production and Circulation of Ethyl Alcohol, Alcoholic Products and Alcohol-Containing Products", the restriction on distilled spirits mentioned in Article 13, Point 2 of Federal Law No. 171-FZ of 22 November 1995 "On the State Regulation of Production and Circulation of Ethyl Alcohol, Alcoholic Products and Alcohol-Containing Products" was no longer valid.

438. Noting that the Russian Federation did not exclude the possible introduction of a State monopoly on the distribution of alcoholic products, and that CU Regulations provided that the CU Commission could issue an exclusive import licence for such enterprises, some Members requested the Russian Federation to ensure that, in the event of such introduction, it would not create a disguised restriction on imports of alcoholic products into the Russian Federation, nor would it create unduly burdensome procedures for imports. In response, the representative of the Russian Federation referred to paragraph 253 of the Section "Registration requirements for import/export operations" of this Report.

439. Some Members expressed concerns about measures applied by the Russian Federation that, in their view, restricted trade in beef, pork, and poultry meat and products. These Members requested information on the basis for these measures and on when they would be terminated. In response, the representative of the Russian Federation informed the Members that, for the purpose of ensuring the conditions for the stable development of the Russian production of poultry, beef and pork meat, and products thereof, on the basis of Government Resolution No. 1111 of 24 December 2010 "On Import of Beef, Pork and Poultry Meat in 2011", and taking into account Federal Law No. 164-FZ of 8 December 2003 "On the Fundamental Principles of State Regulation of Foreign Trade Activity" and the Law of the Russian Federation No. 5003-1 of 21 May 1993 "On Customs Tariff" (as last amended on 28 June 2009), the Government had approved the list of goods and volumes of their importation into the Russian Federation from 2010 to 2012. These quotas were administered by issuance of non-automatic licenses by the Ministry of Industry and Trade, as described in the Section "Tariff Quotas" of this Report. Earlier safeguard import quotas had been converted into TRQs on 1 January 2006, as described in the Section "Tariff Quotas" of this Report.

(b) Import Licensing Systems

440. The representative of the Russian Federation noted that, from 1 January 2010, the legal basis for the import licensing system in the Russian Federation was established in the Agreement on Common Measures of Non-Tariff Regulation in Respect of Third Countries, signed on 25 January 2008 (hereafter: CU Agreement on Non-Tariff Regulation), the Agreement on the Introduction and Application of Measures Concerning Foreign Trade in Goods on the Common Customs Territory in Respect of Third Countries (hereafter: CU Agreement on Measures Concerning Foreign Trade), signed on 9 June 2009, and the Agreement on Licensing in the Area of Foreign Merchandise Trade of 9 July 2009 (hereafter: CU Licensing Agreement) and the Agreement on the Regime and Implementation of Tariff Quotas as of 12 December 2008. The purpose of the licensing regime was to monitor and control imports of goods which, for various reasons, were classified as sensitive by the CU Parties and/or by the international community. By CU Commission Decision No. 132 of 27 November 2009 "On a Single Non-Tariff Regulation of the Customs Union of the Republic of Belarus, the Republic of Kazakhstan and the Russian Federation" (hereafter: CU Commission Decision No. 132), the CU Commission approved the Common List of Goods that might be subject to Non-Tariff Measures (hereafter: Common List, see Table 28), which came into force on 1 January 2010. For the Russian Federation, in addition to the products already subject to such requirements, wines, vitamins and a number of radio-electronic products became newly subject to non-tariff measures as a result of CU Commission Decision No. 132. The procedure for the importation of specific products, such as products with cryptographic capabilities, precious stones and precious metals, and medicines and pharmaceutical ingredients, were set-out in CU Commission regulations. The authorised body of each CU Party was responsible for issuing and monitoring the implementation of non-automatic licenses and/or automatic licenses (permits).

441. The representative of the Russian Federation explained that in addition to the CU Agreements and Commission Decisions, national legislation of the Russian Federation, including Federal Law No. 164-FZ of 8 December 2003 "On the Fundamentals of State Regulation of Foreign Trade Activity" (as last amended on 7 April 2010) and Government Resolution No. 364 of 9 June 2005 "On the Approval of the Regulations for Licensing in the Area of Foreign Trade in Goods and on Creating and Keeping a Federal Data Bank of Issued Licenses", continued to regulate the application of the licensing regime in the Russian Federation. For example, Federal Law No. 164-FZ established the conditions and procedures for applying supervision of export and/or import of certain kinds of goods. Similarly, Federal Law No. 164-FZ set-forth the procedures for applying for an import licence or permit. In cases where a licence and/or permit application was not approved, the right of the importer to appeal the decision was regulated by the national legislation of the CU Parties. In the Russian Federation, the right to appeal was regulated by the Regulations for Licensing in the Area of Foreign Trade in Goods ratified by Government Resolution No. 364 (paragraph 18), according to which "decisions and actions of the authorised body responsible for issuing licenses could be appealed according to the stipulated procedure".

442. Some Members requested information on whether an import licence or permit issued by one CU Party would allow importation of the good into all CU Parties or would importation be limited to the Party issuing the licence or permit.

443. In response, the representative of the Russian Federation explained that an import licence or permit authorised the licensee or permit holder to import the relevant good into only the CU Party that issued the licence or permit; the licence or permit did not authorize the licensee or permit holder to import the relevant good into other CU Parties. He further explained that the licence or permit did, however, give the licensee/permit holder the right to transit the good through the territory of the other CU Party to the territory of the Party that issued the licence or permit.