Monitoring of the Federal Legislation dated 27.04.2005

Federal Law No. 40-FZ of April 26, 2005 on the Ratification of the Agreement between the Government of the Russian Federation and the Government of the Lithuanian Republic on Avoidance of Double Taxation and Prevention of Avoidance of Payment of Taxes for the Incomes and Capital Taxes

Ratifies the Agreement signed in Moscow on June 29, 1999. The Agreement applies to the incomes and capital taxes and permits the residents to enjoy exemptions from the paid amount of tax in the amount of tax due for payment in the other contracting state if the national legislation does not envisage a more beneficial taxation.

Ruling of the Constitutional Court of the Russian Federation No. 36-O of January 18, 2005 on the Refusal to Accept for Consideration the Appeal of the Open-Type Joint-Stock Company "Oil Company Yukos" against Violation of the Constitutional Rights and Freedoms by Provisions of Item 7 of Article 3 and Article 113 of the Tax Code of the Russian Federation

The applicant challenged constitutionality of the provision of Article 113 of the Tax Code of the Russian Federation stating that an entity may not be called to account for a tax violation if three years (period of limitation) have passed from the day of committing the violation or the day following the end of the tax period when the violation was committed. Earlier, the Arbitration Court of the city of Moscow, when examining the case, did not apply the provision on the term of limitation for the tax liability because of the revealed taxpayer unfairness. According to the Arbitration Court of the city of Moscow, the norms of the tax legislation providing the rights or guarantees to bona fide taxpayers, may not apply to unfair ones.

The Constitutional Court of the Russian Federation emphasised that the universal application of the conclusions of this kind is not permissible in this case, and may not serve as grounds to deprive the applicant of the guarantees specified in Article 113 of the Tax Code of the Russian Federation.

Decision of the Government of the Russian Federation No. 248 of April 22, 2005 on the Endorsement of the Rules of Carrying out of the Contest for the Multiple Communication Services

Defines the procedure of organisation and carrying out of the contest for the right of rendering of multiple communication services to select communication operators rendering services in a public-use communication network to get this right, as well as the procedure of concluding the contract for such services. The contest organiser shall be the Federal Agency of Communication.

Order of the Ministry of Economic Development of the Russian Federation, Ministry of the Industry and Power Supplies of the Russian Federation and the Ministry of Finance of the Russian Federation No. 73/81/58n of April 15, 2005 on the Endorsement of the Procedure Defining the Notion of "Industrial Assembly" and Specifying Application of the Given Notion for the Cases of Import to the Territory of the Russian Federation of Automobile Components to Produce Motor Vehicles of Headings 8701-8705 of the Foreign Trade Commodity Nomenclature and Their Units

"Industrial assembly" of motor vehicles implies a system of serial production on the basis of production processes providing for design production capacities of the enterprise at least 25,000 units per year with a two-shift working cycle including the types of works listed in the Order.

Import of automobile components classified under the codes of the Foreign Trade Commodity Nomenclature of the Russian Federation for "industrial assembly" of motor vehicles is implemented on the basis of the agreement concluded between the Ministry of Economic Development and the Russian legal entity.

Registered in the Ministry of Justice of the Russian Federation on April 25, 2005. Reg. No. 6543.

Order of the Federal Service for Financial Markets No. 05-4/pz-n of March 16, 2005 on the Endorsement of the Standards of Issue of Securities and Registration of Securities Prospectuses

The new standards of issue of securities and registration of prospectuses of securities define the rules regulating the issue of securities, issuer options and bonds of legal entities, procedure of registration of prospectuses of securities. The document does not apply to the issue of state and municipal securities, as well as the issue of the bonds of the Bank of Russia. The new document contains significant changes as compared to the earlier available Standards of Issue endorsed by the Decision of the Federal Commission for Securities Market of Russia No. 03-30/ps of June 18, 2003.

The Order introduces a requirement to present the documents of payment of the state duty for the examination of the application and for the state registration. Lifts restrictions prohibiting professional participants of the securities market to render services to issuers to prepare prospectuses of securities (services of a financial advisor at the securities market) in the presence of any civil obligations between them. Introduces a requirement to disclose information of such obligations in the prospectus of securities.

Removes individual additional functions of financial advisors at the securities market pertaining to control over the placing of securities and disclosing of information in the course of issue of securities.

Removes obstacles preventing the purchase of securities in the course of their placing by professional participants rendering the services of a financial advisor to the issue or services of placing the securities (underwriting), as well as any securities of the issuer before the state registration of the report of the results of issue of securities.

Introduces a new price-forming mechanism for the placing of securities on the basis of the special terms of tenders (auction) envisaging the sending of two types of purchase applications (competitive - in prices and non-competitive), defining the minimum offering price (cut-off price) by the issuer and satisfaction of submitted requests.

Introduces the rule of endorsement of the report of the results of issue of securities by the person implementing the functions of the personal executive body of the issuer.

Registered in the Ministry of Justice of the Russian Federation on April 20, 2005. Reg. No. 6531.

Letter of the Central Bank of Russia No. 63-T of April 20, 2005 on the Inclusion of Securities in the Lombard List of the Bank of Russia

The list of securities included in the Lombard List of the Bank of Russia shall include the bonds of the loans of the city of Moscow with the state registration numbers of issues RU27041MOS, RU25042MOS.

Letter of the Ministry of Finance of the Russian Federation No. 03-05-01-07/6 of March 28, 2005

The taxpayer may reduce the taxable base for the incomes tax of natural persons not only for expenses for construction or purchase of dwelling space in the monetary form, but also when the rights are handed over under a promissory note. Meanwhile, the promissory note handed over in payment of the cost of the dwelling space may be recognises as taxpayer expenses only if it was purchased by him from a third party in the framework of civil relations. The promissory note issued to the seller in his own name in payment for the cost of the dwelling space may not be recognised as expenses, since the maker of the promissory note does not hand over any property to the seller of the dwelling space, but only assumes obligation to make the payment under the promissory note in the future.