FEDERATION TO THE WORLD TRADE ORGANIZATION 41 страница

- RUB 10 million when conducting the port-related activity associated with the warehousing of goods which were not excise goods or mineral raw material, along with storage of or wholesale stock-exchange trading in them; or

- RUB 2.5 million when conducting other port-related activity.

Firms engaged in the extraction of minerals, steelmaking or the manufacture of goods subject to excise taxes, with a few exceptions, including the manufacture of automobiles and motorcycles, could not locate in the SEZs. The Government of the Russian Federation could define other types of prohibited activities in a SEZ according to the national legislation.

1095. The representative of the Russian Federation also explained that within the authority granted by Federal Law No. 116-FZ, the Government of the Russian Federation could establish SEZs, other than port SEZs, only on land plots that were State and municipal property. Generally, all types of SEZs were established by Government Resolution after a tendering process, although until 1 January 2015 and, under exceptional circumstances, the Government could establish an SEZ directly, without such a process. Except for port zones, SEZs were established for a 20-year term without extension. Port zones were established for a 49-year period, also without extension. Upon expiration of the 20-year period for manufacturing zones, technological parks, and recreation zones, and of the 49-year period for port zones, the SEZs would be liquidated and general customs and a tax regime would be applied on the former territory of the SEZs. Under these circumstances, or if the time period provided for in the contract of a SEZ resident expired, imported goods which had been placed under the customs procedure of free customs zone would return to normal customs procedures within three months and would have to be exported or the exempted taxes and tariffs would have to be paid. The investment goods (i.e., means of production) of residents in these circumstances would be considered to be goods of the CU and payment of the previously exempted taxes and tariffs was not required. Moreover, early termination of a SEZ could occur only (a) to protect the life and health of the population, cultural values and the environment, or to provide for the defence of the country and security of the State; (b) if within a three-year period of its establishment there had been no agreements concluded with potential residents to operate in the zone; or (c) if there had been no relevant activity by residents within the zone for a three-year period.

1096. With a view to implementing the provisions of Federal Law No. 116-FZ, pursuant to Presidential Decree No. 1107 of 5 October 2009, the Ministry of Economic Development (MED) coordinated and administered the activity of all SEZs within the Russian Federation jointly with local Governments. In addition, each SEZ established a supervisory board to register residents, to carry out the day-to-day administration and management of the individual zones, and to ensure that the terms of operation laid out in Federal Law No. 116-FZ and the individual contracts signed with residents were adhered to.

1097. The representative of the Russian Federation informed Members, that following the first tender conducted in accordance with Federal Law No. 116-FZ in 2005, six regions had been permitted to establish a SEZ regime: four technological parks (in Moscow (Zelenograd) and Moscow Region (Dubna), Saint-Petersburg and Tomsk); and, two SEZs of the manufacturing type (in Tatarstan (Elabuga) and Lipetsk region). The respective Resolutions of the Government Nos. 779 - 784 "On the Creation of these Zones" were issued on 21 December 2005. These SEZs became operative after the conclusion of contracts between the MED (the Federal Executive power body designated to manage the zones) and respective local Governments. The main specialization of these zones was the following:

- manufacturing of home electronics (in particular, refrigerators) in Lipetsk region zone;

- manufacturing of cars and their components, advanced technology products in petrochemical sphere in Elabuga zone;

- development of information and nuclear technologies in Dubna zone;

- development of micro- and nano-electronics in Zelenograd zone;

- development of advanced technology products in St.-Petersburg zone; and

- development of new materials, bio-nanotechnologies and medical technologies in Tomsk zone.

1098. Subsequently, he continued, additional SEZs had been established by Resolutions of the Government, including eight recreation zones (in Stavropol region; Kaliningrad region; Irkutsk region; Krasnodar region; Altai Republic; Altai region; Republic of Buryatiya; and, the North Caucasian Federal District), one additional manufacturing zone in Samara and three Port SEZs in Khabarovsk region, Ulyanovsk and Murmansk.

1099. The representative of the Russian Federation emphasized that Federal Law No. 116-FZ did not establish any special regime for foreign investments within the SEZs that was different from the regime in force in the rest of the Russian territory, and foreign invested firms irrespective of the percentage of foreign participation could be registered as residents of the zones subject to fulfilment of respective requirements applied on a non-discriminatory basis to all applicants. Once registered, they were equally eligible for the benefits available to domestically invested residents. The representative of the Russian Federation stated that the provisions for registration as a SEZ resident were contained in Articles 12 - 31 of Federal Law No. 116-FZ. Legal Persons intending to be registered as residents must submit an application including information on the intended activities of the applicant in the SEZ, the area and type of land required, and the volume of capital investment contemplated, as well as copies of the certificate of State registration and tax registration of the applicant, and constituent documents. Additional documents were required in the following cases:

- For application on activities in port SEZs: information confirming receipt of a security for payment of customs duties and taxes; a copy of the activity licence if required under the legislation of the Russian Federation; and, documents supporting the data regarding acceptance by the customs body of security for payment of customs duties and taxes.

- For application on activities in recreation zones, other documents could be requested in accordance with the legislation of the Russian Federation.

The applicant must also submit a business plan and a positive evaluation of the plan by a bank or other credit organization meeting criteria established by the Government of the Russian Federation. If the SEZ managing authorities accepted the application, an "Agreement on Exercising Activities" in the SEZ would be developed. It was this Agreement that established the terms of the resident status of the applicant in the SEZ. Failure to live up to the terms of the Agreement was grounds for termination of the resident status. Details on the development and, as necessary, termination, of the "Agreement on Exercising Activities" were contained in Federal Law No. 116-FZ. He further stated that an exhaustive list of documents were required for registration as a resident of an SEZ, except for recreation zones.

1100. Foreign legal entities could not become SEZ residents unless they were registered as a Russian commercial organization, within the municipal border of the territory where the SEZ had been established, in accordance with the national legislation of the Russian Federation. Both residents and non-residents of SEZs could conduct business activity on the territory of the SEZs, except for port SEZs, in compliance with laws of the Russian Federation (Article 10.3 of Federal Law No. 116-FZ), however, only residents of SEZs could enjoy tax and other incentives (Article 37 of Federal Law No. 116-FZ), including exemptions from customs duties, taxes, bans and other restrictions of economic character established in accordance with the Russian legislation (e.g. trade remedy measures) for the goods imported into the territory of the SEZ under the regime of a free customs zone. Such incentives would be granted automatically to all residents of the SEZ. Tax incentives included expedited procedures for acceptance of expenditures for research and development activities; elimination of the 30 per cent limitation on transfer of losses to subsequent tax periods; reduction of single social tax for the residents of technological parks; and, a five-year exemption from land and property taxes. Residents of the SEZs were not entitled to have branches and representative offices outside the territory of the SEZ where the resident was registered (Article 10.4 of Federal Law No. 116-FZ), in order to prevent the possibility of a SEZ resident from evading tax obligations and from becoming, in effect, an offshore entity that could use the SEZ tax and tariff preferences for purposes not connected with legitimate activities in a SEZ.

1101. In response to a question from a Member, the representative of the Russian Federation stated that Federal Law No. 116-FZ did not impose any export performance requirements and did not restrict access of imported goods to the territory of the SEZs. He explained that after the accession of the Russian Federation to the WTO, the Russian Federation would enforce its WTO obligations in its SEZs.

1102. The representative of the Russian Federation further explained the main features of the regime of a free customs zone as applied to goods imported into the territory of the SEZs, in accordance with the provisions of Article 37 of Federal Law No. 116-FZ. For goods of both foreign and Russian origin located and used within an SEZ territory, the customs procedure of free customs zone was applied by the customs authorities in accordance with the CU Customs Code. Customs duties, VAT and excise taxes, and non-tariff restrictions (other than prohibitions of goods not permitted within the Russian Federation) were not applied to imports. Export duties, prohibitions and restrictions, otherwise applied to goods exported from the Russian Federation, were not applied to exports from the Russian Federation to the SEZs. The list of goods subject to such exemptions was approved by the customs authorities for each SEZ resident, according to the declared activity of such resident. The goods could be imported to the territory of manufacturing zones and technological parks under the regime of a free customs zone, if they were used either for production and reprocessing, or for technological and innovation activity respectively.

1103. The representative of the Russian Federation emphasized that goods imported by the residents of a SEZ and then released, without further processing, for free circulation into the rest of the customs territory of the Russian Federation were subject to import duties, VAT, and excise taxes, and if these goods had been subject to bans and other restrictions of economic character established in accordance with the Russian legislation, these bans or other restrictions would again apply (as provided for by Article 37 of Federal Law No. 116-FZ). Article 37.19 of Federal Law No. 116-FZ also provided that when imported goods were used by the SEZ residents in a production process and the final products were released for free circulation into the rest of the customs territory of the Russian Federation, the import duties, VAT, and excise taxes still needed to be paid for the imported goods that were incorporated in the final processed goods. This was done without taking into account any change in tariff line designation through substantial transformation, quantity of local content in the final good, or the value and the quantity added as a result of processing. In such cases, for the purpose of calculation of the customs duties to be paid, the customs value and the quantity of imported goods being incorporated in the processed goods was determined as of the date of placement of the imported goods under the customs regime of a free customs zone or the customs value and quantity of processed goods as of the date of their release for free circulation. The representative of the Russian Federation further described the legal framework and main conditions of operation of the SEZs in the Magadan and in the Kaliningrad regions.

(b) Kaliningrad SEZ

1104. The representative of the Russian Federation informed Members that Federal Law No. 16-FZ of 10 January 2006 "On the Special Economic Zone of the Kaliningrad Region and on Amending some Legislative Acts of the Russian Federation" entered into force on 1 April 2006, replacing Federal Law No. 13-FZ of 22 January 1996 "On the Special Economic Zone in the Kaliningrad Region" (as amended on 22 July 2005). As foreseen by Federal Law No. 16-FZ, the Kaliningrad SEZ was created for a period of 25 years. The Kaliningrad SEZ would cease to exist on the basis of a new Federal Law that would be adopted after the expiration of this 25-year period, but would enter into force not earlier than one year after its official publication.

1105. Federal Law No. 16-FZ envisaged the functioning within the territory of the Kaliningrad region of a customs regime of a free customs zone. Foreign goods were imported to and used in the territory of the SEZ without payment of the customs duties and taxes and were not subject to bans and other restrictions of an economic character established in accordance with the Russian legislation (e.g., trade remedies). Goods imported by the residents of the Kaliningrad SEZ and then released for free circulation into the rest of the customs territory of the Russian Federation were subject to import duties, VAT, and excise taxes, and, if these goods had been subject to bans and other restrictions of an economic character, established in accordance with the Russian legislation, these bans and restrictions would again apply (as provided for by Article 13 of Federal Law No. 16-FZ and the Customs Code of the Russian Federation). In reply to a question of one Member, the representative of the Russian Federation explained that the excise and VAT exemptions for imports of excisable goods had been suspended and, then at a later stage re-introduced. Excisable goods could not be imported to the territory of the Kaliningrad SEZ under this regime. The Government of the Russian Federation had the right to define other goods that could not enjoy this regime as well. The current list of such goods was defined by the Resolution of the Government No. 186 of 31 March 2006 (as last amended by the Resolution of the Government No. 1002 as of 8 December 2010). According to the current tax legislation (Article 181 of the Tax Code), car spare parts and components, as well as kits for assembly were not considered as excisable goods.

1106. With the exception of some contracts concluded under Federal Law No. 13-FZ of 22 January 1996 (see paragraph 1108), Federal Law No. 16-FZ mandated that goods, processed in the Kaliningrad SEZ from imported products (materials, raw materials, components, parts) and released for free circulation into the rest of the Russian Federation, were subject to customs duties, and taxes applied to the imported goods used in manufacturing of the processed goods. In such cases, for the purposes of calculation of the customs duties to be paid, the customs value and the quantity of imported goods being part of the processed goods were determined by the date of placement of the imports under the customs regime of a free customs zone. The rates of such duties applied were determined on the basis of the country of origin of the imported goods used in processing. When goods used in processing were imported from different countries, the MFN rate was applied in case of changes to any of the first four digits of the HS code, as the result of processing, or, if the customs value of the goods imported from different countries was the same. Customs duties rates for the country of origin of imported goods with the highest customs value would be used in other cases. Customs clearance fees were not levied with respect to goods imported into the Kaliningrad region, under the customs regime of a free customs zone, or with respect to products of reprocessing of those imported goods, released for free circulation into the rest of the territory of the Russian Federation.

1107. The representative of the Russian Federation further explained that both residents and non-residents of the SEZ could conduct business activity in the territory of the SEZ, however, only residents of the SEZ could enjoy tax and other incentives that were provided for by Federal Law No. 16-FZ. In terms of investments, this Federal Law did not establish any restrictions based on the origin of capital of a legal entity. To become a SEZ resident, a legal entity had to be established in accordance with the Russian legislation and registered as a resident in the Kaliningrad region; goods were required to be manufactured and investments made within the territory of the Kaliningrad SEZ; and, the investment project of the legal entity had to meet the requirements described below. In accordance with Federal Law No. 16-FZ, the following legal persons could conduct business activity (including investing) in the territory of Kaliningrad SEZ, but could not become SEZ residents:

- legal persons, who paid taxes according to the special tax regimes, as provided for by the Tax Code of the Russian Federation (for example, simplified tax regime or tax regime related to the realization of production sharing agreements); and

- financial organizations, including credit organizations, insurance companies and professional participants of a securities market.

The investment projects of prospective residents of the Kaliningrad SEZ were required to meet the following requirements:

- be performed within the territory of the Kaliningrad region;

- not be aimed at exploitation of crude oil and natural gas and rendering services in these spheres, not be aimed at manufacture of alcoholic products, tobacco goods and other excisable goods (except cars and motorcycles), the list of which was established by the Resolution of the Government No. 185, as of 31 March 2006;

- not be aimed at wholesale and retail trade, at repair of household devices and objects of personal use, or at rendering of financial services; and

- capital investments must not be less than RUB 150 million and must be made within the time period not exceeding three years from the date of investors registration as a resident of SEZ.

According to Article 9 of Federal Law No. 16-FZ, the customs regime of a free customs zone was applied to foreign goods imported into and used in the territory of the Kaliningrad region by the juridical persons registered in the Kaliningrad region (regardless of whether these juridical persons were residents of the Kaliningrad SEZ or not). To prevent the re-exportation of goods imported free of customs duties without further processing from the Kaliningrad region to the rest of the customs territory of the Russian Federation, customs control over goods entering the territory of the Kaliningrad region was performed by the customs authorities located in the region.

1108. The representative of the Russian Federation further explained that for all juridical persons and individual entrepreneurs registered in the Kaliningrad region, which had been established and active under the previous Federal Law No. 13-FZ of 22 January 1996 (except those included in the registry of residents of SEZs, under Federal Law No. 16-FZ), a ten-year transition period, from the date of entry into force of Federal Law No. 16-FZ on 1 April 2006, was provided. During the transition period, these legal entities would continue to enjoy the treatment envisaged by Federal Law No. 13-FZ. This included exemption from export duties when goods were exported outside the customs territory of the Russian Federation. It also provided that goods imported under the free customs zone regime and then released for free circulation into the rest of the Russian Federation were not subject to customs duties and taxes if they met sufficient processing criteria. The goods were considered as meeting sufficient processing criteria, if one of the following conditions was fulfilled: processing of goods resulted in a change of the HS code at a level of any of the first four digits, or value added of the processing operations accounted for not less than 30 per cent of the cost of the goods. However, independently of these conditions, the following operations, according to Federal Law No. 16-FZ, did not meet sufficient processing criteria: (a) ensuring of safety of goods during their transportation and storage; (b) preparation of goods for transportation and sales (splitting of the lots, packing, sorting); (c) simple assembly operations established by the Resolution of the Government No. 184 as of 31 March 2006 (as last amended on 24 May 2007); and (d) mixing of goods originating from different countries, if characteristics of the final product did not differ significantly from the characteristics of the goods mixed. After expiration of the above-mentioned ten-year transition period, the provisions of Federal Law No. 16-FZ, governing free customs zone regime in the Kaliningrad SEZ, would apply without these reservations.

(c) Magadan SEZ

1109. In response to requests for information on the Magadan Special Economic Zone, the representative of the Russian Federation stated that the Magadan Special Economic Zone had been established in accordance with Federal Law No. 104-FZ of 31 May 1999 "On the Special Economic Zone in the Magadan Region" (as last amended on 24 November 2008). Provisions of this Federal Law did not apply to foreign trade operations with precious metals. This Federal Law would remain in effect until 31 December 2014, and allow the Magadan SEZ to function until that time.

1110. The Magadan region was a Far North district with limited (three months, a year maximum) sea navigation possibilities, and without railway and highway communications with other regions of the Russian Federation. The basic sectors of the regional economy were gold-mining and fishery, accounting for 70 - 75 per cent of the total volume of industrial production of the region. More than 90 per cent of the industrial production of the Magadan region, except gold, was consumed in the region itself.

1111. The representative of the Russian Federation further explained that the establishment of a SEZ in this region, was primarily aimed at social and economic development of the region as a way to compensate for its unfavourable location. Both residents (called "participants" in the Magadan SEZ) and non-participants of the SEZ could conduct business activity in the territory of the SEZ, however, as with other SEZs, only registered participants of the Magadan SEZ could enjoy tax and other incentives. The Magadan SEZ participants had been exempted from Federal taxes (except deductions made to the Pension Fund and the Social Insurance Fund of the Russian Federation) until 31 December 2006. According to the amendments enacted in December 2005, from 1 January 2007 to 31 December 2014, participants of the Magadan SEZ would be exempted from taxes on profits invested in the development of production and social sphere in the territory of the Magadan region. These tax incentives were granted if a SEZ participant had a separate balance sheet for his activity in the territory of the SEZ. Status as a SEZ participant could be granted to juridical persons and individual entrepreneurs registered in the territory of the SEZ in accordance with the legislation of the Russian Federation that conducted their main business activity and kept not less than 75 per cent of their key assets in the territory of the SEZ as provided by Article 3 of Federal Law No. 104-FZ.

1112. Federal Law No. 104-FZ, as amended, envisaged the functioning within the territory of Magadan City of a customs regime, of a free customs zone, based on the activities of registered participants of the Magadan SEZ. Foreign goods were imported into and used in the territory of the SEZ without payment of the customs duties and were not subject to bans and other restrictions of an economic character established in accordance with the Russian legislation (e.g., trade remedies). Similar exemptions for value-added and excise taxes had been suspended regularly since the establishment of the SEZ, most recently until 1 January 2012 by Federal Law No. 205-FZ of 24 November 2008. Such imports used by participants for production or their own consumption could be circulated in the Magadan region without paying the exempted duties. Products produced in the SEZ and exported to other countries were exempted from export duties and other fees, except customs clearance fees, and from payment of any import duties exempted on imported inputs in the manufacturing process.

1113. Goods imported by the participants of the Magadan SEZ and then released for free circulation into the rest of the customs territory of the Russian Federation without further processing were subject to import duties, and, if these goods had been subject to bans and other restrictions of an economic character established in accordance with the Russian legislation, these bans and restrictions would apply again. Federal Law No. 104-FZ provided that excisable goods (defined in Article 181 of the Tax Code) could not be imported to the territory of the Magadan SEZ without payment of the applicable taxes. The Government of the Russian Federation had the right to define other goods and the terms or transitional periods, for which those goods could not enjoy this regime as well. Unless, they were considered to have originated in the Magadan SEZ, goods processed in the SEZ from imported products (materials, raw materials, components), and released for free circulation into the rest of the Russian Federation, were subject to customs duties and taxes applied to the imported goods used in the manufacturing of the processed goods. In such cases, for the purposes of calculation of the customs duties or taxes to be paid, the customs value and (or) the quantity of imported goods was determined as the date of placement of the imports under the customs regime of a free customs zone. When customs duties were applied, the rates of such customs duties were determined on the basis of the country of origin of the imported goods used in the processing. When goods used in the processing were imported from different countries, an MFN rate was applied in case of changes to any of the first four digits of the HS code as a result of the processing; or, if the customs value of the goods imported from different countries was the same. Customs duties for the country of origin of imported goods with the highest customs value were used in other cases. Customs clearance fees were not levied with respect to goods imported into the Magadan region under the customs regime of a free customs zone, or with respect to products for reprocessing of those imported goods, released for free circulation into the rest of the territory of the Russian Federation.

1114. The representative of the Russian Federation explained that for juridical persons and individual entrepreneurs that were participants of the SEZ in the Magadan region in accordance with Federal Law No. 104-FZ, there were special provisions that lasted until the SEZ expired on 31 December 2014. Participants registered in the SEZ were understood as juridical persons registered for the same benefits in the entire Magadan region, carrying out their main business activity and having not less than 75 per cent of their capital assets in the territory of the Magadan SEZ. Articles 6.4 and 6.6 of Federal Law No. 104-FZ provided that goods processed in the SEZ from imported products (materials, raw materials, components, parts) and considered to be originating in the SEZ, were not subject to any further application of customs duties when released for free circulation into the rest of the customs territory of the Russian Federation. He stated that goods were considered to be originating from the SEZ when they were fully produced in its territory or, if the imported inputs used to produce the goods met sufficient processing criteria. The goods were considered as meeting sufficient processing criteria if one of the following conditions was fulfilled: processing of goods resulted in a change of the HS code at a level of any of the first four digits; processing of production and technological operations, sufficient for the goods to be considered originating from the SEZ; or, the value added of the processing operations accounted for not less than 30 per cent of the goods price (for electronics and sophisticated technological goods - not less than 15 per cent). However, independent of these conditions, the following operations, according to Federal Law No. 104-FZ, did not meet the criteria for sufficient processing: (a) ensuring of safety of goods during their transportation and storage; (b) preparation of goods for transportation and sales (splitting of the lots, packing, sorting); and (c) mixing of goods originating from different countries, if characteristics of the final product did not differ significantly from the characteristics of the goods mixed. In addition, any imports used by participants of the Magadan SEZ for production or their own consumption could be circulated in the Magadan region without paying the exempted duties.