Windfall tax for major companies to be introduced in Russia

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Monitoring of the Federal Legislation dated 16.12.2003

Decision of the Constitutional Court of the Russian Federation of December 15, 2003 on the Case of Constitutionality of Individual Provisions of the Law of the Ivanovo Province on the Municipal Service of the Ivanovo Province Pursuant to the Request of the Legislative Assembly of the Ivanovo Province

Examines individual provisions of the Law of the Ivanovo Province on the municipal service of the Ivanovo Province earlier recognised by the courts of general jurisdiction as contradicting the federal legislation and not applicable.
The Constitutional Court of the Russian Federation recognised Subitem 4 of Item 3 of Article 42 of the Law as complying with the Constitution of the Russian Federation inasmuch as it specifies opportunities to dismiss a municipal servant in cases of conviction not permitting to continue previous work and not complying with the Constitution of the Russian Federation inasmuch as it specifies opportunities to dismiss a municipal servant in cases of conviction permitting to continue previous work.
Subitem 7 of Item 3 of Article 42 of the Law is recognised as complying with the Constitution of the Russian Federation inasmuch as it specifies opportunities to dismiss a municipal servant because of insufficient qualification confirmed by a certification and not complying with the Constitution of the Russian Federation inasmuch as it specifies opportunities to dismiss a municipal servant in cases of mistrust expressed by the representative body of local government.
The Decision is entered into force immediately after annunciation.

Federal Law No. 174-FZ of December 10, 2003 on the State Registration of the Issues of Stocks Placed before the Entry into Force of the Federal Law on the Securities Market without the State Registration

The documents for the state registration of the mentioned issues of stocks must be presented no later than within one year from the day of entry into force of the present Law. The absence of the state registration of the issue of stocks may not serve as an obstacle for liquidation or transformation of the joint-stock company if the decision on its liquidation or transformation was taken before the end of this period. If the joint-stock companies fail to present within the mentioned time the documents for the state registration of the issue of stocks, they must be liquidated under the lawsuits of the bodies in charge of the state registration of legal entities.
The state registration is arranged simultaneously with the state registration of the reports of the results of issue of these stocks. The body in charge of the registration must register the issue and the report of the results of issue of stocks or take a motivated decision to refuse their state registration no later than within 60 days from the date of receiving of all necessary documents.
The Law specifies that the deals serving as grounds for the purchase of these securities may not be recognised as invalid because of the absence of the state registration.
The Federal Law is entered into force 10 days after the day of its official publication.

Federal Law No. 173-FZ of December 10, 2003 on the Currency Regulation and Currency Control

The Law is aimed at liberalisation of the currency legislation and envisages a significant mitigation of the procedures of state regulation and control for currency operations.
Refines the notions of the foreign currency and the currency of the Russian Federation, residents, non-residents, authorised banks. Introduces the notions of internal and external securities, special account, reservation and currency exchanges.
Specifies that currency values include only foreign currencies and external securities. Thus, the list of the types of property recognised as currency values excludes precious metals and stones.
Provides a new definition of the notion of the currency operation: such operations now include the actions aimed at execution or other termination of obligations with currency values and their use as a means of payment, as well as in other cases implying the transfer of the property rights. Currency operations are also considered to be similar actions with the currency of the Russian Federation and internal securities if they are involve non-residents.
The new Law does not envisage differentiation of the currency operations between the current ones and the ones pertaining to capital flow. If the procedure of currency operations and the use of accounts is not specified by the bodies of currency regulation, the currency operations are carried out, the accounts are opened and the operations on the accounts are carried out without restrictions. Currency operations between the residents and non-residents are carried out without restrictions except for a number of currency operations with restrictions specified for the purposes of prevention of a significant reduction of the gold and currency reserves, sharp fluctuations of the rate of the currency of the Russian Federation, as well as to maintain the stability of the balance of payments of the Russian Federation. The mentioned restrictions are of a non-discriminatory nature and shall be abandoned by the bodies of currency regulation as soon as the circumstances causing them are removed. The limiting period of th eir effect is January 1, 2007.
It is not permitted to specify the demand on the part of the bodies of currency regulation to obtain individual permissions by residents and non-residents. Besides, it is not permitted to specify the demand on the part of the bodies of currency regulation on the preliminary registration except for a number of cases.
The Law contains the general rule prohibiting to commit currency operations in foreign currencies between residents. At the same time, there is a list of currency operations that may be committed between residents. For the first time, defines legislatively also the list of currency operations carried out without restrictions between residents and authorised banks, which is not a final one and may be extended by the Bank of Russia.
The Law introduces the right of the residents to open without restrictions accounts in the banks located on the territory of foreign OECD or FATF member-states according to the notification procedure and - in other cases - according to the procedure specified by the Bank of Russia which may imply preliminary registration. Legal entities will enjoy this right only one year after the Law is entered into force.
Provides a detailed description of the procedure of preliminary registration including the exhaustive list of the documents submitted by the residents and non-residents and the time limits for consideration of applications for the preliminary registration, as well as describes the reasons of refusal of the preliminary registration.
Preserves the requirement on the repatriation of the currency receipts and their subsequent obligatory sale combined with opportunities of regulation of the procedure of purchase and sale of foreign currencies at the internal currency market. The amount of the obligatory sale of the part of the currency receipts did not change.
From January 1, 2007, the norm on the notification procedure of opening/closing of accounts will apply to all accounts opened by the residents in the banks located on the territory of foreign states.
The Federal Law is entered into force 6 months after the day of its official publication with exceptions.

Federal Law No. 172-FZ of December 10, 2003 on the Amendments to the Law of the Russian Federation on the Organisation of Insurance Work in the Russian Federation and on Invalidation of Some of the legislative Acts of the Russian Federation

Introduces fundamental notions of the insurance market: insurance, insurance activities.
Specifies that the objects of the personal insurance may be proprietary interests pertaining to life insurance, as well as to insurance against industrial accidents and diseases, medical insurance. The objects of the proprietary insurance may be proprietary interests pertaining to property insurance, insurance of civil responsibility and insurance of entrepreneurial risks.
Increases the share of participation of foreign capital in the registered capitals of insurance organisations (from 15% to 25%) being branches of foreign investors (parent organisations) or possessing a share of foreign investors in its registered capital greater than 49% when the body of insurance enforcement stops the issue of the licenses.
Introduces new participants of the insurance market - insurance actuaries. These may be the citizens of the Russian Federation possessing a qualification certificate and carrying out activities on the basis of a labour contract or civil contract with the insurer in calculation of insurance tariff rates, insurance reserves of the insurer, assessment of his investment projects using actuary estimates.
Specifies principles and requirements to the licensing of insurance activities.
The authorised body is empowered with the keeping of the Uniform State Insurance Register which, together with insurers, associations of insurers and insurance brokers, will contain information also on other professional participants of the insurance market - mutual insurance companies, insurance actuaries.
The Law introduces the norms aimed at improvement of the system of supervision of insurance activities. Defines: the system of organisation, main functions, sphere of reference of the state insurance enforcement in the Russian Federation, as well as the issues of coordination of activities with the ministries and agencies of the Russian Federation, bodies of executive power of the subjects of the Russian Federation where it pertains to the insurance methodology, as well as control over execution of the insurance legislation of the Russian Federation.
The earlier created insurance organisations must build their registered capitals according to the new terms of ensuring financial stability of insurers using the following procedure: before July 1, 2004 - up to 1/3 of the specified amount of the registered capital, before July 1, 2006 - up to 2/3 and before July 1, 2007 - the specified amount of the registered capital. Insurance organisations failing to fulfil the mentioned requirements will have their licenses revoked without appropriate directive by the body of insurance enforcement from July 1 of the appropriate year.
The Federal Law is entered into force 30 days after the day of its official publication with exceptions.

Federal Law No. 171-FZ of December 10, 2003 on the Amendments to the Forestry Code of the Russian Federation

Refines the reasons and procedure of transfer of the forestry lands into the non-forestry lands and the lands of the forestry fund into the lands of other categories. The Forestry Code of the Russian Federation is also being brought in compliance with the Land Code of the Russian Federation.
Articles 66 and 123 are extended to include the norms restricting opportunities to build immovable property on the land plots of the forestry fund, other structures and specifying as an obligatory prerequisite for obtaining the permission for such construction the presence of the positive statement of the State Ecological Expert Commission. The area of the occupied plot of the forestry fund may not be greater than 10% of the total area of the plot of the forestry fund allocated for cultural and recreational, tourist and sports purposes.
The Federal Law is entered into force from the day of its official publication.

Decision of the Plenum of the Higher Arbitration Court of the Russian Federation No. 19 of November 18, 2003 on Some Issues of Application of the Federal Law on Joint-Stock Companies

Explains individual issues pertaining to application by the courts of arbitration of the Federal Law on joint-stock companies taking into account the latest amendments. The review reflects the issues pertaining to the sphere of application of the mentioned Law, procedure of institution of the joint-stock company and changing of its type, procedure of resolving of the disputes pertaining to the building of the registered capital of the company and providing for the rights of stock-holders, invalidation of the decisions of the management bodies of the company and other issues.

Order of the Ministry for Antimonopoly Policy of the Russian Federation No. 404 of November 25, 2003 on the Amendments to the Rules of Examination of the Cases of Violation of the Antimonopoly Legislation

As the grounds for the initiation and examination of the cases, decision making and issue of orders of the antimonopoly body may serve presentations of the bodies, applications of organisations and natural persons, as well as initiative of the antimonopoly body.
The Order introduces the right of the bodies or organisations (their officials) empowered with the functions or rights of the bodies of executive power and local government to apply to court of law or court of arbitration to invalidate fully or partly the decisions and orders of the antimonopoly body.
Reduces two times the time limits of appealing against a decision or order of the antimonopoly body. Now, the mentioned time limit makes three months from the day of adoption or issue of the decision or order.
Specifies an exhaustive list of the reasons of suspension of execution of the decision or order of the antimonopoly body. In other cases, submission of the application does not suspend execution of the mentioned decisions and the order (earlier, the suspension was initiated in all cases).
Registered in the Ministry of Justice of the Russian Federation on December 10, 2003. Reg. No. 5325.

Order of the Ministry of the Russian Federation for the Press, TV and Radio Broadcasting No. 214 of October 7, 2003 on the Endorsement of the List of the Minimum Necessary Works (Services) in Organisations of the Press, TV and Radio Broadcasting and Means of Mass Communication Providing during Strikes for the Public Order, Preservation of the Property of the Organisation and Employees, As Well As Machines and Equipment Which Imply a Direct Hazard to the Life and Health of People If Stopped

The mentioned list includes the works in electric power, heat, water and gas supplies for the enterprises and social objects, works to ensure the fire safety at the object, preservation of material values of the enterprise, documents, as well as employees. Besides, the list includes the issues of the official all-Russia and regional daily newspapers, issues of official election documentation and issues of the daily information TV and radio programs.
Registered in the Ministry of Justice of the Russian Federation on December 10, 2003. Reg. No. 5324.

Order of the Ministry of Justice of the Russian Federation No. 310 of December 5, 2003 on the Endorsement of the Specimens of the Documents Necessary for the State Registration of a Political Party and Its Regional Division

Endorses the new specimens of the following documents: decision of the constituent congress of the political party, decision of the congress of the all-Russia public organisation (movement), protocol of the general meeting of the founding of the regional division of the political party and the protocol of the conference of the transformation of the regional division of the all-Russia public organisation.
Registered in the Ministry of Justice of the Russian Federation on December 10, 2003. Reg. No. 5319.

Regulation of the Ministry of Finance of the Russian Federation and the Central Bank of Russia Nos. 106n, 240-P of November 26, 2003 on the Procedure of Termination of Operations on the Accounts of the Federal Budget of 2003 Opened in the Divisions of the Payment Network of the Bank of Russia and Credit Organisations (Branches)

Specifies the procedure of termination of operations on the accounts of incomes allocated by the federal treasury bodies of the Ministry of Finance of Russia between the levels of the budget system of the Russian Federation, termination of operations on the accounts of the resources of the federal budget in the currency of the Russian Federation and in foreign currencies.
Registered in the Ministry of Justice of the Russian Federation on December 9, 2003. Reg. No. 5315.

Direction of the Central Bank of Russia No. 1337-U of November 3, 2003 on the Procedure of Operations of Purchase of Coins of Precious Metals Being a Legal Means of Cash Payment on the Territory of the Russian Federation Sold by the Bank of Russia Carried out by Credit Organisations Registered for Cash Services in the Divisions of the Moscow Territorial Directorate of the Bank of Russia

The Moscow Territorial Directorate shall send to the requesting credit organisations information on the variety of coins suggested for sale indicating the catalogue No., nominal value and the name of the coin, type and content of the chemically pure precious metal in the coin, alloy proof figure, mintage quality. Credit organisations shall draw up the request in a free form and send it to the Moscow Territorial Directorate by fax.
The handing out of the coins to the representatives of the credit organisation is arranged on the basis of a proxy and is registered as an act of acceptance.
The Direction is entered into force 10 days after the day of its official publication in the Herald of the Bank of Russia.

Order of the State Customs Committee of the Russian Federation No. 1014 of September 15, 2003 on the Issue of the Permission to Process the Commodities on the Customs Territory

Endorses the blank form "Permission to Process Commodities on the Customs Territory" and lists information necessary for the issue of the permission to process the commodities on the customs territory.
The Order is entered into force from January 1, 2004 with exceptions.
Registered in the Ministry of Justice of the Russian Federation on December 5, 2003. Reg. No. 5305.

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