Monitoring of the Federal Legislation dated 12.07.2006

Federal Law No. 105-FZ of July 6, 2006 on the Amendments to Individual Legislative Acts of the Russian Federation on Detached Service and Transfer of Servicemen, As Well As Suspension of the Military Service

Changes the existing system of secondment, transfer of servicemen and suspension of the military service specified in the Federal Law on the military duty and the military service.

According to the Federal Law, servicemen attached to the state bodies envisaging state civil service may dismiss from the military service while being transferred to the state civil service.

Servicemen attached to organisations and institutions fulfilling the tasks in state defence and security, if the federal state service is not envisaged in them, will serve in the mentioned organisations and institutions only on condition of suspension of the military service.

The Federal Law also envisages opportunities of allotment of servicemen to the commander (chief) according to the procedure defined in the Federal Laws and normative legal acts of the President of the Russian Federation.

The Federal Law is entered into force from January 1, 2007.

Federal Law No. 104-FZ of July 6, 2006 on the Amendments to Individual Legislative Acts of the Russian Federation in Pursuance of the Reduction of the Length of the Draft Service

The Federal Law envisages a switchover from January 1, 2008 to the 12-month-long draft military service, changing and abandoning of a number of reasons of granting respites, as well as exemption from the military service for students having undergone training at military chairs and having graduated from institutions of higher professional education.

To maintain the troops (forces) in permanent combat readiness in the course of transfer to the one-year-long draft military service, the Federal Law envisages two stages of transfer: at the first stage (from January 1, 2007), to transfer to one year and six months, and at the second stage (from January 1, 2008) to one year length of service.

Since the length of the alternative civil service is interconnected with the length of the draft military service according to Article 5 of the Federal Law on the alternative military service, the Federal Law envisages a similar reduction of this length of service.

To satisfy the increased needs of the military organisation of the state in draft resources in this connection, the Federal Law envisages, as an involuntary measure, a reduction of a number of reasons of respites for the draft granted to citizens.

The Federal Law is entered into force from July 1, 2006 except for individual norms entering into force according to the special procedure.

Federal Law No. 103-FZ of July 6, 2006 on the Amendments to the Federal Law on the Military Duty and Military Service

Amends Articles 32, 35 and 38 of the Federal Law on the military duty and military service.

Article 32 of the mentioned Federal Law defining the notion of contract for military service is being brought in compliance with Item 3 of Article 10 of the Federal Law on the system of the state service of the Russian Federation stating that the employer of the federal state servant is the Russian Federation.

Article 35 of the Federal Law on the military duty and military service envisages in addition that citizens discharged from institutions of professional military education for lack of discipline, bad achievements or lack of will to study or having refused to conclude the contract for the military service, as well as the citizens having graduated from the given educational institutions and dismissed from the military service ahead of the term specified in the contract for a number of reasons, shall reimburse resources of the federal budget spent on their military (special) training according the procedure and in the amounts specified by the Government of the Russian Federation.

The Federal Law amends Article 38 of the Federal Law on the military duty and military service to introduce a new type of contract for the military service – for an indefinite period of time (until the limiting age).

The Federal Law is entered into force from July 1, 2007.

Decision of the Government of the Russian Federation No. 418 of July 7, 2006 on Some Measures to Implement the Decree of the President of the Russian Federation No. 1313 of October 13, 2004 В“Issues of the Ministry of Justice of the Russian FederationВ”

Amends the procedure of submission by the Ministry of Justice of the Russian Federation of representations to revoke or amend the normative legal acts of the federal bodies of executive power contradicting the Constitution of the Russian Federation and legislation of the Russian Federation from the State Register of Acts maintained by the Ministry of Justice.

In case of a failure to execute within one month the representation revoking or amending the mentioned normative legal acts, the Ministry of Justice is entitled to submit to the Government of the Russian Federation a proposal to revoke or suspend such act.

The Decision introduces the annul period of submission by the Ministry of Justice to the Government of the Russian Federation of information on the practice of the state registration of normative legal acts pertaining to rights, freedoms, and duties of the man and citizen, specifying the legal status of organisations or those of interagency nature (earlier, such information must have been submitted on the quarterly basis).

Information handed over by the Ministry of Justice to mass media on the acts recognised by the Supreme Court as not complying with the legislation shall include also the acts recognised as not complying with the legislation by the Higher Arbitration Court.

The Decision omits the provision permitting the first deputy heads of the federal body of executive power managing the industry sectors (blocks) formed in these bodies to endorse individual normative legal acts.

Decision of the Government of the Russian Federation No. 416 of July 6, 2006 on the Endorsement of the Regulation on the Licensing of Pharmacy Activities

According to the new Regulation on the licensing of pharmacy activities, the license for pharmacy activities is handed out not only to legal entities but also to independent entrepreneurs. Thus, the legislation on the licensing of pharmacy activities is being brought in compliance with the Decision of the Supreme Court of the Russian Federation No. GKPI 2003-11 of February 4, 2003 having recognised as illegal restriction of opportunities to engage in pharmacy activities for independent entrepreneurs.

The licensing body is the Federal Service of Enforcement in the Sphere of Public Health and Social Development of the Russian Federation. Earlier, the licenses were handed out by the Ministry of Public Health of the Russian Federation or the bodies of executive power of the subjects of the Russian Federation.

The Regulation defines the licensing procedure of pharmacy activities in the sphere of circulation of medicines intended for medical use, including wholesale trade, retail trade of medicines and making medicines. Specifies the licensing requirements and terms, list of documents submitted by the candidate, procedure of checking of authenticity of information presented by the candidate, issue of the copy of the license, information published in mass media pertaining to the licensed activities.

The period of validity of the issued license did not change and makes 5 years.

The pervious Regulation on the licensing of pharmacy activities endorsed by the Decision of the Government of the Russian Federation No. 489 of July 1, 2002 is invalidated.

Decision of the Government of the Russian Federation No. 415 of July 6, 2006 on the Endorsement of the Regulation on the Licensing of Production of Medicines

The Regulation defines the procedure of licensing of production of medicines by legal entities intended for medical use.

The Regulation specifies the requirements to the candidate, defines the list of documents submitted to get the license, procedure of checking of information in them, the reasons for issue of the copy of the license, as well as regulates other issues pertaining to the licensing of the given activities.

The authority to license production of medicines is vested in the Federal Service of Enforcement in the Sphere of Public Health and Social Development.

The license is granted for 5 years. The period may be prolonged through redrawing of the license.

The license requirements, as before, envisage, in particular, availability in the applicant staff of specialists in charge of production, quality and labelling of medicines with a higher or special secondary education (chemical technologies, biotechnologies, pharmacy or medicine) and experience of work in the speciality of at least 3 years. Professional development measures for the given specialists should be arranged at least once in 5 years.

Application for the license or its redrawing is submitted on the paid basis. The amount and procedure of payment of the state duty is defined in the legislation on taxes and fees.

The Decision of the Government of the Russian Federation No. 500 of July 4, 2002 having regulated the issues of licensing of medicines before is invalidated.

Letter of the Federal Agency for Construction and the Housing and Communal Complex No. SK-2843/02 of July 10, 2006 on the Prices for Design and Survey Works in Construction for the III Quarter of 2006

Reports information used to adjust the prices for design and survey works in construction for the III quarter of 2006.

Recommended indices of change of the cost of: design works in construction make 2.13 to the level of basic prices as of January 1, 2001 and 16.42 to the level of basic prices as of January 1, 1995; survey works in construction – 2.19 to the basic prices calculated from the guides of basic prices for engineering surveys as of January 1, 2001 and 24.91 to the basic prices calculated from the guides of basic prices for engineering surveys and the Collection of Prices for Survey Works in Capital Construction taking into account the Interim Recommendations for the Adjustment of the Basic Prices as of January 1, 1991.

In the II quarter of 2006, the indices of change of the cost of design works were fixed in the amount of 2.08 to the level of basic prices as of January 1, 2001 and 16.04 to the level of basic prices as of January 1, 1995. The indices of change of the cost of survey works made: 2.14 to the level of basic prices as of January 1, 2001 and 24.33 to the basic prices calculated as of January 1, 1991.

Letter of the Federal Agency for Construction and the Housing and Communal Complex No. SK-2842/02 of July 10, 2006 on the Indices of Change of the Estimated Cost for the III Quarter of 2006

Works out the indices of change of the estimated cost for the whole of construction and installation works and by items of expenses for the III quarter of 2006 by the subjects of the Russian Federation for the objects financed while attracting resources of the federal budget.

The mentioned indices have been worked out on the basis of the reporting information of the regional bodies of price forming in construction for the II quarter of 2006 including the inflation forecast for the III quarter of 2006, take into account the full complex of construction and installation works and are intended for major estimates of the cost of construction using the basic indices method, preparation of documentation for tenders and general economic estimates in the investment sphere.

The indices for construction and installation works are determined taking into account overhead expenses and estimated profit. The overhead expenses are assumed with a reduction coefficient of 0.94 including the reduction from January 1, 2005 of the rate of the uniform social tax.

Letter of the Department of the Tax and Customs Tariff Policy of the Ministry of Finance of the Russian Federation No. 03-08-07/Belar of July 7, 2006

To provide for the taxation on the territory of the Russian Federation in accordance with the reached agreements in the framework of the conciliation procedure between the Ministry of Finance of the Russian Federation and the Ministry for Taxes and Fees of the Republic of Belarus, Belarus independent entrepreneurs must present on the reciprocity principle to the tax bodies of the Russian Federation a certificate confirming their tax residency on the territory of the Republic of Belarus.

Provided the certificate confirming the tax residency on the territory of the Republic of Belarus is presented to the tax bodies of the Russian Federation, and the permanent representation is formed on the territory of the Russian Federation, the profit obtained by the independent entrepreneur from activities in the Russian Federation in the framework of the formed permanent representation is subject to taxation in the Russian Federation only at the rates specified in Article 224 of the Tax Code of the Russian Federation: 13% for the residents of the Russian Federation and 30% for non-residents.