Monitoring of the Federal Legislation dated 4.07.2005

Federal Constitutional Law No. 5-FKZ of June 30, 2005 on the Amendments to the Federal Constitutional Law on the Forming of the New Subject of the Russian Federation As a Result of the Merger of the Perm Province and the Komi-Permyatsky Autonomous District

The amendments are introduced pursuant to the introduction of the new procedure of empowering of the higher officials (heads of the higher executive bodies of state power) of the subjects of the Russian Federation with appropriate authority. Specifies that the Governor of the Perm Territory is empowered with his authority at the presentation of the President of the Russian Federation by the Legislative Assembly of the Perm Province and the Legislative Assembly of the Komi-Permyatsky Autonomous District for five years.

In the transient period, the laws shall be adopted by the Legislative Assembly of the Perm Province and the Legislative Assembly of the Komi-Permyatsky Autonomous District in the form of the laws of the Perm Territory, shall be singed and conveyed to the public by the Governor of the Perm Territory.

The Federal Constitutional Law is entered into force from the day of its official publication.

Federal Law No. 78-FZ of July 1, 2005 on the Invalidation of Some of the Legislative Acts (Provisions of Legislative Acts) of the Russian Federation and on Amendments to Some of the Legislative Acts of the Russian Federation Pursuant to the Revocation of the Tax on Inherited and Donated Property

Abandons the tax on inherited or donated property. In this connection, invalidates the Law of the Russian Federation No. 2020-I of December 12, 1991 on the tax on inherited or donated property with amendments. The tax on inherited or donated property is excluded form the list of the federal taxes and fees specified in Article 13 of the Tax Code of the Russian Federation.

The list of incomes of natural persons exempted from taxation includes incomes in the monetary form and in kind obtained from natural persons according to donation procedure, except for the cases of donation of immovable property, transport vehicles, stocks, shares and contributions. However, the incomes obtained according to the donation procedure are exempted from taxation completely if the donator and the beneficiary are family members and/or close relatives.

Invalidates the provision stating that the notary must present to the tax body a certificate of the cost of the property transferred in the citizens' property necessary for the calculation of the tax on the inherited or donated property.

The Federal Law is entered into force from January 1, 2006, however, no sooner than one month after the day of its official publication.

Federal Law No. 77-FZ of June 30, 2005 on the Amendments to Article 29 of the Federal Law on the Military Duty and Military Service

According to the amendments, the draft commissions of the subjects of the Russian Federation are empowered with authority to take decisions similar to those of the subordinate draft commissions. Earlier, the draft commission of the subject of the Russian Federation could only revoke the decisions of the subordinate draft commissions, not to take its own decision.

The Federal Law is entered into force from October 1, 2005.

Federal Law No. 76-FZ of June 30, 2005 on the Invalidation of the Provisions of Legislative Acts of the Russian Federation on the State Accreditation of Scientific Organisations

Abandons the functions of the state accreditation of scientific organisations recognised to be overabundant.

Federal Law no. 75-FZ of June 30, 2005 on the Ratification of the Agreement between the Government of the Russian Federation and the Government of the Italian Republic on Cooperation in the Sphere of Utilisation of the Russian Nuclear Submarines Withdrawn from the Navy and on Safe Handling of Radio Active Waste and Spent Nuclear Fuel

Ratifies the Agreement signed in Rome on November 5, 2003. The Agreement envisages, in particular, the granting of a free aid by the Italian side to the Russian side by allocating financial resources in the amount of EUR 360 million within 10 years for the works, supply of commodities and rendering services in the sphere of utilisation of nuclear submarines, processing of spent nuclear fuel, physical protection of nuclear objects and other.

Federal Law No. 74-FZ of June 30, 2005 on the Amendments to Article 182 of Part 2 of the Tax Code of the Russian Federation

Removes a technical error in Article 182 of the Tax Code of the Russian Federation specifying the objects of taxation for excise duty taxes. Specifies that the excise duty tax on oil products is collected exclusively when operations are carried out on the territory of the Russian Federation.

The previous wording of this Article did not specify the procedure of taxation with excise duty tax of operations of purchase and sale of oil products outside the territory of the Russian Federation. Therefore, in the absence of the special norm, such operations abroad were subject to the common taxation procedure, and organisations had to accrue the excise duty tax without the right for subsequent exemption, which is in contradiction of the economic essence of the given tax.

The Federal Law is entered into force one months after the day of its official publication. The Federal Law applies to legal relations emerging form January 1, 2003.

Federal Law No. 73-FZ of June 30, 2005 on the Creation of the Tere-Kholsky Regional Court of the Republic of Tyva

Creates the Tere-Kholsky Regional Court of the Republic of Tyva with jurisdiction covering the territory of the Tere-Kholsky Kozhuun (rural region) of the Republic of Tyva.

Jurisdiction of the Kyzylsky Regional Court of the Republic of Tyva covers the territory of the Kyzylsky Kozhuun (rural region) of the Republic of Tyva.

The Federal Law is entered into force from the day of its official publication, except for the provisions on the jurisdiction of the mentioned regional courts to be entered into force three months after the day of entry into force of the Federal Law.

Federal Law No. 72-FZ of June 30, 2005 on the Creation of the Regional Courts in the Republic of Khakassiya

Creates the Abazinsky and the Sorsky Regional Courts in the Republic of Khakassiya with jurisdiction covering the territory of the city of Abazy and the city of Sorsk of the Republic of Khakassiya respectively.

The Federal Law is entered into force from the day of its official publication except for the provisions on the jurisdiction of the mentioned courts to be entered into force three months after the day of entry into force of the Federal Law.

Federal Law No. 71-FZ of June 30, 2005 on the Amendments to Article 217 of Part 2 of the Tax Code of the Russian Federation

Increases from Rbl 2,000 to Rbl 4,000 the limiting amount of incomes of natural persons exempted from taxation in the form of the cost of gifts from legal entities and independent entrepreneurs, prizes received at contests and competitions, amounts of material aid rendered by employers to their employees, reimbursement by employers of the cost of purchased medicines paid out to their employees if assigned by their doctors, as well as the cost of any prizes in contests and games. The given provision is entered into force from January 1, 2006.

Article 32 exempts from taxation aid (in the monetary form and in kind), as well as the gifts received by veterans, invalids of the Great Patriotic War, widows of servicemen killed during the wars with Finland, Japan, Great Patriotic War, widows of diseased invalids of the Great Patriotic War and former prisoners of concentration camps, prisons, ghettos, including the underage, where they do not exceed Rbl 10,000 during the tax period. The paid amounts of the income tax from the mentioned persons must be returned no later than within two months from the day of entry into force of the Federal Law.

The Federal Law is entered into force one month after the day of its official publication with exceptions. Article 2 applies to legal relations emerging from January 1, 2005.

Ruling of the Constitutional Court of the Russian Federation No. 167-O of May 12, 2005 on the Refusal to Accept for Processing of the Appeal of the Closed-Type Joint-Stock Company "Cellular Company" against Violation of the Constitutional Rights and Freedoms by Item 5 of Article 167 of the Tax Code of the Russian Federation

According to the applicant, the challenged norm envisages the payment by the taxpayer of the value added tax for the receivables for the rendered but uncovered services, i.e. at the taxpayer own expense, which is in contradiction of the nature of the value added tax as an indirect tax.

The Constitutional Court of the Russian Federation, while refusing to accept the appeal for processing, emphasised that the fact of underpaid amounts does not exclude opportunities of collection of the value added tax that must be paid from the taxpayer own resources in principle.

Decision of the Government of the Russian Federation No. 405 of June 30, 2005 on the Amendments to the Rules of Financing of Expenses to Grant State Social Aid to Citizens in the Form of a Set of Social Services Endorsed by the Decision of the Government of the Russian Federation No. 864 of December 29, 2004

The list of the documents submitted by the citizens to the Social Insurance Fund of Russia to get accommodation for sanatorium and resort treatment now does not include the sanatorium and resort card.

Decision of the Government of the Russian Federation No. 404 of June 30, 2005 on the Amendments to the Customs Tariff of the Russian Federation Pertaining to Baryta Paper and Paperboard

The rate of the import customs duty for baryta paper and paperboard used as the basis for the photo sensitive paper and boar is reduced from 15% to 5% of the custom cost. The new rates shall apply for nine months. As to the "other" paper and paperboard, the rates remain at the previous level of 15% of the customs cost.

The Decision is entered into force two months after the day of its official publication.

Order of the Ministry of Public Health and Social Development of the Russian Federation No. 420 of June 24, 2005 on the Endorsement of the List of Preventive Measures for the Year 2005 to Reduce Industrial Injuries and Occupational Diseases of Employees Partially Financed at the Expense of Contributions for the Obligatory Social Insurance Against Industrial Accidents and Occupational Diseases

The list includes now the following preventive measures: obligatory periodic medical examinations of employees engaged in works involving adverse and/or hazardous industrial factors; payment for the preventive treatment, including the sanatorium and resort treatment, for employees engaged in works involving adverse and/or hazardous industrial factors; payment for the cost of purchase for the employees engaged in works involving adverse and/or hazardous industrial factors, as well as the works carried out in special temperature conditions, of certified means of individual protection according to specified norms; certification of operator positions for the working conditions and certification of works for the safety of work in organisations.