NEW COMMISSIONS REGULATE FOREIGN TRADE

1. SUMMARY: TWO NEW FEDERAL INTERAGENCY COMMISSIONS HAVE APPEARED TO REGULATE FOREIGN TRADE IN RUSSIA, ONE FOR CUSTOMS TARIFFS AND ONE FOR "DEFENSIVE MEASURES." THE TWIN COMMISSIONS, CREATED SIMULTANEOUSLY, ARE DESIGNED TO PROVIDE ADDITIONAL PROTECTION FOR THE RUSSIAN DOMESTIC MARKET. TOGETHER THEY ENHANCE THE CONTROL OVER TRADE POLICY EXERCISED BY DEPUTY PRIME MINISTER OLEG DAVYDOV, WHO CHAIRS BOTH OF THEM. THE COMMISSION ON CUSTOMS TARIFFS FORMALIZES PROCEDURES ALREADY IN USE. THE COMMISSION ON DEFENSIVE MEASURES IS A NEW BUT EXPECTED STEP THAT DRAWS HEAVILY ON FOREIGN PRACTICE. ALTHOUGH EACH HAS SOME POLICY FUNCTIONS, THE GIST OF THEIR WORK IS TECHNICAL. THE DECREES' PROVISIONS APPEAR TO BE COMPATIBLE WITH THE NEW FOREIGN TRADE BILL AND EXPLICITLY STIPULATE CONFORMITY TO INTERNATIONAL AGREEMENTS. END SUMMARY.

2. THE RUSSIAN GOVERNMENT HAS CREATED TWO NEW FEDERAL INTERAGENCY COMMISSIONS TO REGULATE CUSTOMS TARIFFS AND TO INITIATE DOMESTIC MARKET PROTECTION MEASURES. THE COMMISSIONS WERE CREATED AT THE SAME TIME AND ARE BOTH HEADED BY DEPUTY PRIME MINISER OLEG DAVYDOV, MINISTER OF FOREIGN ECONOMIC REATIONS.

COMMISSION ON CUSTOMS AND TARIFF QUESTIONS

3. THE "COMMISSION OF THE RUSSIAN FEDERAL GOVERNMENT ON CUSTOMS AND TARIFF QUESTIONS" WAS CREATED B GOVERNMENT DECREE NO. 436 ON APRIL 28, 1995. WITH THE GOAL OF FURTHER "LIBERALIZING" RUSSIA'S FOREIGN ECONOMIC RELATIONS, THE COMMISSION IS TASKED WITH COORDINATING THE PREPARATION OF PROPOSED MEASURES TO REGULATE IMPORTS AND EXPORTS. THE COMMISSION IS SPECIFICALLY CHARGED WITH SETTING TARIFF RATES, ANALYSIS OF EXISTING TARIFFS, DRAFTING OF ANY NEW LEGISLATION AND CHANGES IN TARIFF CATEGORIES. THE COMMISSION IS ALSO RESPONSIBLE FOR ENSURING THAT RUSSIAN PRACTICE CONFORMS TO THE REQUIREMENTS OF THE WORLD TRADE ORGANIZATION (THE DECREE ACTUALLY NAMES THE GATT INSTEAD). MEETINGS REQUIRE A QUORUM OF TWO- THIRDS, DECISIONS MUST BE UNANIMOUS.

4. MFER OFFICIALS TOLD US ON JUNE 7 THAT THE MEMBERSHIP OF THE COMMISSION HAS NOT YET BEEN DETERMINED AND THAT THE COMMISSION THEREFORE HAS NOT BEGUN TO FUNCTION. THEY SAID THE COMMISSION HAS A MORE OR LESS PERMANENT CHARACTER BUT POINTED OUT THAT IT FORMALIZES THE EXISTING INTERAGENCY PROCESS FOR THE MAKING OF TARIFF POLICY AND THE ANALYSIS AND ADJUSTMENT OF TARIFF RATES. THEY NOTED THAT THE GOVERNMENT IS CURRENTLY DRAFTING SOME AMENDMENTS TO THE CUSTOMS LAW (PASSED IN MARCH 1994) TO REMOVE INCONSISTENCIES WITH INTERNATIONAL NORMS, AND THAT THE DUMA WILL NEED TO APPROVE THESE CHANGES.

COMMISSION ON DEFENSIVE MEASURES IN FOREIGN TRADE

5. THE "COMMISSION OF THE RUSSIAN FEDERATION ON DEFENSIVE MEASURES IN FOREIGN TRADE" WAS CREATED BY GOVERNMENT DECREE NO. 437, ALSO ISSUED APRIL 28, 1995. THE COMMISSION WILL COORDINATE THE DETERMINATION OF "DEFENSIVE MEASURES" PROVIDED BY RUSSIAN LAW, INCLUDING QUANTITATIVE RESTRICTIONS (IMPORT QUOTAS) AND SPECIAL, ANTIDUMPING, AND COMPENSATORY DUTIES. MEASURES MUST CONFORM TO RUSSIAN LAW AND INTERNATIONAL AGREEMENTS.

6. THE COMMISSION IS REQUIRED TO CONDUCT INVESTIGATIONS OF ALLEGED HARM OR POTENTIAL HARM TO DOMESTIC PRODUCTION AS A RESULT OF DUMPING, PRODUCTION OR EXPORT SUBSIDIES, OR SURGES IN IMPORTS. IN THE EVENT OF AN AFFIRMATIVE DETERMINATION, THE COMMISSION WILL PREPARE A FORMAL PROPOSAL OF MEASURES FOR GOVERNMENT APPROVAL, WHICH CAN INCLUDE NEGOTIATION OF A QUOTA OR VRA. IT SHOULD ANALYZE THE LIKELY EFFECT OF THE PROPOSED MEASURES ON COMPETITION IN THE DOMESTIC MARKET. THE COMMISSION MUST ALSO PUBLICIZE INVESTIGATIONS AND THEIR RESULTS.

7. THE MEMBERSHIP OF THE COMMISSION, AS SPECIFIED BY THE DECREE:

O.D. DAVYDOV, DEPUTY PM, COMMISSION CHAIRMAN;
L.A. BOCHIN, CHAIRMAN OF STATE ANTIMONOPOLY COMMITTEE, COMMISSION DEPUTY CHAIRMAN;
YU.N. GREKOV, FIRST DEPUTY MINISTER OF FOREIGN ECONOMIC RELATIONS, COMMISSION DEPUTY CHAIRMAN;
S.YU. GLAZEV, CHAIRMAN OF THE DUMA'S COMMITTEE ON ECONOMIC POLICY;
V.K. GUSEV, CHAIRMAN OF THE DUMA'S COMMITTEE ON INDUSTRY, CONSTRUCTION, TRANSPORT AND ENERGY;
I.S. MATEROV, FIRST DEPUTY MINISTER OF ECONOMY;
V.I. MESHERYAKOV, DEPUTY CHAIRMAN OF THE STATE CUSTOMS COMMITTEE;
I.L. MITROFANOV, DIRECTOR FOR IMPORT-EXPORT ACTIVITY, MFER;
A.A. SEDOV, FIRST DEPUTY CHAIRMAN OF THE COMMISSION FOR HARD-CURRENCY EXPORT CONTROL;
V.A. PORYADIN, DEPUTY DIRECTOR OF THE FEDERAL SECURITY SERVICE;
A.L. SAMUSEV, DEPUTY MINISTER OF FINANCE;
S.S. TSYPLAKOV, DEPARTMENT DIRECTOR, GOVERNMENT ADMINISTRATION;
A.M. GLAGOVSKIY, MEMBER OF MFER COUNCIL ON FOREIGN ECONOMIC POLICY.

8. MEMBERS CANNOT BE REPRESENTED BY ALTERNATES, MEETINGS REQUIRE A QUORUM OF TWO-THIRDS, AND DECISIONS REQUIRE A SIMPLE MAJORITY OF THE FULL COMMISSION MEMBERSHIP.

9. MFER OFFICIALS STRESSED TO US, AS THEY HAVE IN PRESS STATEMENTS, THAT THE PROPOSED MEASURES ECHO THOSE EMPLOYED BY OTHER COUNTRIES AND ARE NECESSARY TO DEFEND RUSSIAN COMMERCIAL INTERESTS IN INTERNATIONAL MARKETS AS WELL AS PROTECT THE DOMESTIC MARKET DURING A TIME OF TRANSITION. THEY SAID THAT MORE SPECIFIC REGULATIONS WILL LIKELY BE FORTHCOMING (THE NEW FOREIGN TRADE BILL AUTHORIZES SUCH MEASURES BUT PROVIDES NO FURTHER DETAILS), AND THAT FOR THE TIME BEING THE COMMISSION HAS A PROVISIONAL CHARACTER.

10. TECHNICAL AND ORGANIZATIONAL SUPPORT FOR BOTH COMMISSIONS IS PROVIDED BY THE MINISTRY OF FOREIGN ECONOMIC RELATIONS (MFER).

COMMENT

11. THE NEW COMMISSIONS WERE CREATED SHORTLY BEFORE THE DUMA AND THE FEDERATION COUNCIL APPROVED THE NEW FOREIGN TRADE BILL (CURRENTLY AWAITING PRESIDENTIAL SIGNATURE) AND APPEAR TO BE COMPATIBLE WITH IT. DAVYDOV'S DIRECTION OF BOTH COMMISSIONS FURTHER CONSOLIDATES HIS CONTROL OVER FOREIGN TRADE POLICY, PARTICULARLY GIVEN THE WIDE RANGE OF OTHER AGENCIES REPRESENTED. THE COMMISSION ON CUSTOMS TARIFFS ESSENTIALLY FORMALIZES PROCEDURES ALREADY IN USE. THE COMMISSION ON DEFENSIVE MEASURES IS A COMPLETELY NEW STEP, BUT ONE THAT WE ANTICIPATED, FROM A COUNTRY WITH NO PREVIOUS LEGISLATION IN THIS AREA. ALTHOUGH EACH COMMISSION HAS SOME POLICY FUNCTIONS, THEIR GIST OF

BT
#8242