Windfall tax for major companies to be introduced in Russia

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Daily Monitoring of the Legislation

Monitoring of the Federal Legislation dated 5.12.2003

Order of the Government of the Russian Federation No. 1754-r of December 1, 2003

Endorses the program of changing of the level of state regulated prices (tariff rates) in electric power industry.
The Federal Power Supply Commission of Russia is ordered to define before April 1, 2004 the limiting levels of tariff rates for electric and thermal power supplied by power supply organisations to consumers, including the limiting levels of tariff rates for the population, for the subjects of the Russian Federation for the years 2005-2006 while envisaging, if necessary, their calendar breakdown and by categories of consumers taking into account the regional and other particulars.

Order of the Government of the Russian Federation No. 1747-r of December 1, 2003

Endorses the distribution of the expected savings of the resources of the federal budget for the year 2003. Main administrators and administrators of the resources of the federal budget are permitted to redistribute the limits of budget obligations within the allocated limits of the budget obligations according to the economic classification of expenses of the budget of the Russian Federation 110100 "Labour Remuneration", 110200 "Charges on the Labour Remuneration Fund (Uniform Social Tax) Including Tariff Rates for Obligatory Social Insurance against Industrial Accidents and Occupational Diseases", 110400 "Business Trips", 110700 "Payment for Communal Services", 130300 "Transfers to Population" including subheadings and elements of expenses while preserving budget classification codes.
In the IV quarter of 2003, the granting of interest-free budget loans to the budgets of the subjects of the Russian Federation to cover temporary cash gaps in the execution of the budgets is permitted for the Ministry of Finance of Russia for the additional amount of up to Rbl 500 million at the expense of resources received in the federal budget from the return of the earlier granted budget loans.

Main Directions of the Uniform State Monetary and Credit Policy for the Year 2004 (Approved by the Board of Directors of the Central Bank of Russia on November 3, 2003)

The Bank of Russia forecasts opportunities of macroeconomic development of the country in 2004 following two possible scenarios.
The first one proceeds from the average annual US dollar rate of Rbl 31.7 and the price for oil of USD 18.5 per barrel. Thus, the first option implies that the interest rates for the assets nominated in dollars will rise eventually, the dollar falling will stop, and the mutual exchange rates for the main world currencies will stabilise.
According to the second scenario, the average US dollar rate equals Rbl 31.3 with the price for oil being USD 22 per barrel. The second option implies that interest rates for the main world currencies preserve at the low level, with the dollar remaining weak against the leading world currencies. The second scenario figures are used for the federal budget of 2004.
In 2004, credit organisations will have to provide financial reports according to the international standards of financial reports by transforming the reports drawn up to the Russia rules while applying the professional judgement method and necessary corrections. Financial reports drawn up in such a way will not be used in 2004-2005 to define the bank enforcement regime and applied enforcement reaction measures. It will be used as a basis to assess possible impact of approaches envisaged in the international standards of financial reports on individual figures of activities of credit organisations. Meanwhile, the Bank of Russia will continue its work to improve the reports submitted by credit organisations to the Bank of Russia for enforcement purposes (prudential reports) in view of the switch over to the international standards of financial reports.

Letter of the State Construction Committee of the Russian Federation No. NK-7224/10 of November 10, 2003 on the Entry into Force of the New Estimate and Normative Price-Forming Basis of 2001 in Construction

The State Construction Committee of Russia thinks it necessary to recommend application of the new normatives in the determination of the cost of construction products regardless of the sources of financing. After getting an appropriate order of the Government of the Russian Federation, the State Construction Committee of Russia will send explanations to users on the procedure of application of the documents of the new estimate and normative basis.

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