Monitoring of the Federal Legislation dated 29.06.2011

The Budget Address of President of the Russian Federation D.A.Medvedev of June 29, 2011 on the Budget Policy in the Years 2012-2014

The President of Russia has presented his budget address for 2012-2014. It comprises the results of the 2010 and 2011 budget policy, main challenges and sets out goals and objectives for the next three years. The federal budget for 2012 and the planned period of 2013-2014 will ensure a self-sustained post-crisis development, modernisation of the economy and enhance the level and quality of life of citizens, national defence and security and the effectiveness and transparency of state governance. The dependence of the budget on market volatility and the budget deficit are to be reduced. The measures proposed include the introduction of programme budgets on all levels of government from 2012, a cardinal reconstruction of the state purchases system, the privatisation of large parcels of shares in key state-controlled companies (save infrastructure companies and those affecting national security). In the tax field consolidated statements for the purposes of the profit tax are going to be used and the preparation for the introduction of local tax on immovable property will be completed. For 2012-2013 the rates of insurance contributions to state non-budget funds will be cut from 34% to 30%, and for small businesses and those using a simplified taxation procedure to 20%. Also taxation mechanisms for oil and gas as well as tobacco and spirits shall be improved, and the uniform tax on imputed income will be replaced with a licence system. The necessary financing must be provided for all existing undertakings, like the reform of allowance of money for military servicemen, internal affairs personnel etc., the rising of pensions and social benefits and the upgrading of the public health and education systems. Special attention is paid to the provision of incentives for Russia's innovation development. Decentralisation is envisaged for the area of inter-budget relations, for instance through the use of state programmes.

Federal Law No. 168-FZ of June 28, 2011 on Amending Articles 64.1 and 77 of the Federal Law on Mortgage (Mortgage of Immovable Property) and the Federal Law on the Savings-Mortgage System for the Provision of Dwellings to Military Servicemen

Laws concerning the mortgage and savings-mortgage system for the provision of dwellings to military servicemen are modified. The list of the persons eligible for taking part in the system is broadened.

Federal Law No. 167-FZ of June 28, 2011 on Amending Article 24 of the Federal Law on the Duty to Undergo Military Service and on Military Service

School leavers are given an opportunity to try to enrol in a secondary vocational or higher educational institution before they are drafted in the autumn. The list of the categories of citizens entitled to draft deferment is expanded.

Federal Law No. 166-FZ of June 27, 2011 on the Ratification of the Agreement between the Russian Federation and the Azerbaijan Republic on the State Border

Said agreement has been ratified. It defines the border based on the administrative boundary between the two entities as of the time of dissolution of the USSR. A description and a map of the border are provided as part of the agreement. A joint commission is formed for the purpose of demarcation of the border on the terrain. The relations associated with the operation of the infrastructure facilities crossed by the border or coinciding with it as well as biological resource conservation, water-use and environmental protection are regulated by separate agreements

Federal Law No. 165-FZ June 27, 2011 on the Ratification of Protocol No. 5 between the Russian Federation and the Republic of Armenia on Amending the Agreement between the Russian Federation and the Republic of Armenia on the Russian Military Base on the Territory of the Republic of Armenia of March 16, 1995

Ratifies Protocol No. 5 concerning the Russian military base in Armenia deemed a guarantor of its security. Russia will provide assistance to Armenia in terms of delivering up-to-date and compatible armaments and materiel. The effective term of the agreement is extended from 25 to 49 years with automatic extension every five years, unless a party thereto announces its intent to terminate it.

Federal Law No. 164-FZ of June 27, 2011 on the Ratification of the Stockholm Convention on Persistent Organic Pollutants

Said convention signed by Russia on May 22, 2002 is ratified. It fosters switch to technologies minimising or precluding the deliberate manufacture of such pollutants and assists in liquidation of stockpiled materials, waste and equipment containing such substances, imposition of a ban on the production thereof and search for safe substitutes. The convention provides a non-exhaustive list of persistent organic pollutants and regulates the handling of such substances. The ratification is done with clauses according to which any amendment will require ratification, adoption, approval or accession to become effective for Russia. In respect of any dispute concerning the construction or application of the convention Russia recognises an arbitration tribunal and also referral of the dispute to the International Court as a compulsory measure for any party having such undertaking.

Federal Law No. 163-FZ June 27, 2011 on the Ratification of the European Convention on the Protection of the Archaeological Heritage (Revised)

Said convention, signed on January 16, 1992, is ratified. According to it all remains and items as well as any trace of the human activities of the past, like structures, groups of buildings, developed areas and the surroundings thereof on the surface or under water are deemed pieces of archaeological heritage. Each party to the convention undertakes to create a legal system conducive to protecting the heritage, preventing illegal excavations etc. and to provide funding for archaeological exploration.

Federal Law No. 162-FZ of June 27, 2011 on Amending Some Legislative Acts of the Russian Federation in Connection with the Adoption of the Federal Law on the National Payment System

For instance, the minimum of 18 million roubles of charter capital is set for a newly registered non-banking lending institution that seeks a licence to remit money without opening a bank account. Organisations and individual entrepreneurs have the duty to inform tax bodies of the occurrence or termination of the right of using corporate electronic payment facilities for money remittance. A procedure is provided for collecting compulsory charges at the expense of electronic money on instructions of a tax body sent to the bank. Amendments to the Law on the Insolvency (Bankruptcy) of Credit Organisations prohibit the deeming as invalid transactions of a participant in, or of a settlement centre of, the payment system or of a central clearing counterparty. Amendments to the Law on Countering the Legalisation of Incomes Received through Crime (Money Laundering) make it possible not to identify natural persons when money is remitted without the opening of a bank account, provided the sum does not exceed 15,000 roubles. Amendments to the Law on the Central Bank of the Russian Federation establish the powers of that bank in respect of the national payment system.

Federal Law No. 161-FZ of June 27, 2011 on the National Payment System

Establishes a legal and organisational foundation for a national payment system and an operating procedure for the operation of payment system agents as well as provisions governing the organisation and operation of payment systems and supervision in this field. The law defines the roles of money remittance operators (the Central Bank of the Russian Federation, lending institutions and Vneshekonombank), bank payment agents (subagents), federal postal communication organisations, payment agents, payment system operators, and clearing centres and settlement centres. Rules are provided for electronic money remittance. Individuals are permitted to use non-personified electronic payment facilities, i.e. no client identification will be carried out as required by the law on countering money laundering, unless the balance at any time exceeds 15,000 roubles and the monthly sum total of remittance exceeds 40,000 roubles. For personified and also corporate electronic payment facilities the balance at any time shall not exceed 100,000 roubles. An organisation willing to become a payment system operator should seek a registration certificate from the Central Bank of the Russian Federation, having filed relevant documents. The Central Bank of the Russian Federation is responsible for supervision and monitoring in the national payment system. The law enters into force upon the expiry of 90 days after its official publication, save the provisions having other effective dates.

Federal Law No. 160-FZ of June 27, 2011 on Amending the Law of the Russian Federation on Education

Defines the legal status of integrated curricula for secondary vocational education in the field of the arts. Both general (basic or full) and secondary vocational education are provided within the framework of such curricula. Enrolment for said curricula is allowed to persons having primary general education background who have passed a creative selection conducted in the procedure established by the Ministry of Culture of the Russian Federation by agreement with the Ministry of Education and Science of the Russian Federation.

Federal Law No. 159-FZ of June 27 2011 on Amending Articles 73 and 81 of the Criminal Execution Code of the Russian Federation

Generally, convicts serve sentences in a penitentiary institution within the region where they have resided or have been convicted. However, the law establishes a list of the crimes for which convicts are sent to locations designated by the federal body in charge of the criminal penitentiary system -- participation in an illegal armed formation, the organisation of an extremist community and the activity of an extremist organisation. Grounds are provided for relocating a prisoner from one penitentiary institution to another, including diseases, personal safety etc.

Federal Law No. 158-FZ of June 27, 2011 on Amending Article 18.1 of the Federal Law on the State Corporation "Rostekhnologii"

The term for transferring the property contribution of the Russian Federation to Rostekhnologii is extended. The contribution is made up of the federally-owned shares of the public joint-stock companies formed as the result of transformation and privatisation of federal state unitary enterprises. All in all 442 organisations would have been reformed by 2012. However, certain problems have occurred, like the lack of the necessary technical documentation and right-establishing documents for assets etc. Accordingly, the term for resolving the problems is extended until March 31, 2013.

Federal Law No. 157-FZ of June 27, 2011 on Amending Article 26.13 of the Federal Law on the General Principles of Organisation of Legislative (Representative) and Executive Governmental Bodies of the Subjects of the Russian Federation

These amendments bring that federal law in line with the Budget Code of the Russian Federation. Before that, a public hearing was to be held in respect of a draft regional budget and a report on the implementation thereof. Since the code does not include the notion "draft annual report on the implementation of a budget" the legislative (representative) bodies of the region will consider and confirm the report proper. So, the subject matter of a public hearing will be a draft regional budget and a report -- rather than a draft report -- on the implementation of a budget.

Federal Law No. 156-FZ of June 27, 2011 on Amending the Federal Law on State Fingerprint Registration in the Russian Federation and Article 6 of the Federal Law on Departmental Security Guards in Respect of Issues of Compulsory State Fingerprint Registration

Now, more categories of individuals are subject to compulsory fingerprinting. They include the departmental security personnel and the staff of certain legal entities who record, store, carry and use weapons. Fingerprinting in respect of them will be done by internal affairs bodies and such data will be preserved until these persons reach 80 years of age.

Federal Law No. 155-FZ of June 27, 2011 on Amending Article 37 of the Federal Law on the State Civil Service in the Russian Federation

Provides a new ground for dismissing a state employee on the employer's initiative -- absence for over four months in a row due to temporary disability, including maternity. For some diseases the legislation may set a longer term of retaining a job. A state employee will not be dismissed if his disability is due to an on-the-job injury or occupational disease.

Federal Law No. 154-FZ of June 27, 2011 on the Formation and Abolition of Some District (City) Courts of Murmansk Region

Certain small-staff courts have been abolished and larger ones have been created in their place.

Federal Law No. 153-FZ of June 27, 2011 on the Denunciation of the European Convention on the Protection of the Archaeological Heritage

Said convention of 1969 to which the USSR acceded in 1990 has been denounced by Russia. The reason for it is that on January 16, 1992 the European Convention on the Protection of the Archaeological Heritage (Revised) was signed in Valletta. Simultaneously with the ratification thereof the 1969 convention is to be denounced.

Federal Law No. 152-FZ of June 27, 2011 on the Ratification of the Agreement on the Uniform Principles and Rules of Technical Regulation in the Republic of Belarus, the Republic of Kazakhstan and the Russian Federation

Said agreement has been ratified. It envisages that a uniform list of the products subject to compulsory Customs Union requirements is to be prepared. Technical regulations of the Customs Union as documents having direct effect on the territory of the Customs Union will be elaborated only for the products included in the list. Similar documents issued by the Eurasian Economic Community will prevail over the technical regulations of the Customs Union. Given the conformity of a product with technical regulations, the product will be allowed by the member states to circulate on their territories without additional requirements or conformity procedures.

Federal Law No. 151-FZ of June 27, 2011 on the Abolition of Some District Courts of Chukotka Autonomous Okrug

Due to their small size come courts are abolished since criminal cases on grave and especially grave crimes are to be heard by a panel of three judges and such courts were unable to meet that requirement.

Federal Law No. 150-FZ of June 27, 2011 on the Abolition of Novoderevenskiy District Court of Ryazan Region

A small-sized court is abolished since it could not meet the requirements set out in the legislation.

Federal Law No. 149-FZ of June 27, 2011 on the Abolition of Kurumkanskiy District Court of the Republic of Buryatia

A small-sized court is abolished since it could not meet the requirements set out in the legislation.

Federal Law No. 148-FZ of June 27, 2011 on the Abolition of Some District Courts of the Republic of Kalmykia

Three district courts have been abolished and the matters within their jurisdiction referred to the jurisdiction of other district courts.

Order of the Ministry of Economic Development of the Russian Federation No. 175 of April 18, 2011 on Endorsing the Methodology of an Assessment of the Financial State of a Person Concerned Aimed at Finding Signs of the Person's Insolvency (Bankruptcy) when That Person Pays a Tax on One-off Basis

The order deals with cases when a deferment or an instalment repayment schedule is granted to a person/entity for the payment of a tax. A ground for it is a threat of insolvency (bankruptcy) due to one-off payment of the tax. A methodology is provided for a tax body to asses the financial state of the person/entity -- based on financial statements and information published in accordance with the legislation on insolvency (bankruptcy) etc.