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Daily Monitoring of the Legislation

Monitoring of the Federal Legislation dated 18.07.2006

Decision of the Government of the Russian Federation No. 430 of July 14, 2006 on Special State Scholarships of the Government of the Russian Federation for the Post-Graduate Students and Students Who Study in Federal State Higher and Secondary Vocational Education Institutions <br>

An increase has occurred in the rate of special state scholarships of the Government of the Russian Federation paid out to the post-graduates and daytime students of state higher and secondary vocational education institutions who display outstanding abilities in their studies and in the scientific field. Thus, the post-graduates of federal state higher professional education institutions will be entitled to receive 3,000 roubles, the students of federal state higher vocational education institutions, 1,200 roubles, the students of federal state secondary vocational education institutions, 700 roubles. The rates are effective from January 1, 2006.
Before that, the rates of government scholarships were equal to 1,500, 600 and 350 roubles respectively.

Order of the Government of the Russian Federation No. 1014-r of July 14, 2006<br>

Rossiyskaya Gazeta is designated as the official periodical publication responsible for publishing a comprehensive federal list of the organisations, in particular, foreign and international ones, deemed by Russian courts as terrorist ones.

Decision of Plenary Meeting of the Higher Arbitration Court of the Russian Federation No. 20 of June 22, 2006 on Certain Issues Arising from the Application of Norms of the Customs Code of the Russian Federation on the Periodical Temporary Declaration of Russian Goods (Except for Goods Moved by Means of Pipelines or Power Transmission Lines)<br>

The plenary meeting of the Higher Arbitration Court of the Russian Federation has clarified some issues that can arise from the application of norms of the Customs Code of the Russian Federation concerning the periodical temporary declaration of Russian goods (when goods for which no exact information can be provided for customs formality purposes are allowed for being imported through periodical temporary declaration involving the filing of a temporary customs declaration).

Notably, when Articles 137 and 138 of the Customs Code of the Russian Federation are applied account has to be taken of the following: if as of the time of filing of a temporary customs declaration a normative legal act has been published but not yet put in force, which establishes new customs duties for the period of time within which Russian goods are to be exported the use of a periodical temporary declaration would mean partial exemption from customs payments. Accordingly, in this case a simplified procedure for declaring the Russian goods in the form of a periodical temporary declaration is not applicable.

Decision of Plenary Meeting of the Higher Arbitration Court of the Russian Federation No. 21 of June 22, 2006 on Certain Issues of Arbitration Courts' Practices of Hearing Disputes Involving the Participation of State and Municipal Institutions in Connection with the Application of Article 120 of the Civil Code of the Russian Federation<br>

Explanations have been prepared concerning issues of the arbitration courts' practices of hearing disputes involving the participation of state and municipal institutions in connection with the application of Article 12 of the Civil Code of the Russian Federation which define the general legal situation of institutions, the terms on which their formation is allowed, including the procedure for creating their property, and issues concerning the liabilities of these organisations.

The aspects that must be taken into account are indicated as follows: when cases are heard concerning claims for deeming institutions' transactions null and void; when the scope of powers of an institution is defined in respect of incomes received by these organisations from the profit-yielding activities mentioned in their constitutive documents, and also the property acquired with these incomes; when the owner of the institution's property is held liable on lines of vicarious liability for debts of the institution (including the case of winding up of the institution) and when it is determined if the owner may dispose of the property assigned to the institution by the right of operative management, for instance by leasing it out.
Thus, for instance, it is explained that the Civil Code of the Russian Federation, without regulating the content of the institution's right of disposing at its own discretion of property acquired with incomes from income-yielding activities, determines that the institution cannot possess the property by right of ownership. The Budget Code, fixing the details of keeping record of these incomes, does not modify the scope of the institution's rights established by the Civil Code of the Russian Federation concerning these incomes and the property purchased with them.

Since the owner of the institution's property cannot be held accountable without a claim to the principal debtor being filed with the court if a creditor addresses his claim for repayment of the institution's debt directly to a vicarious debtor without addressing a claim to the institution the arbitration court is to suggest that the creditor have the principal debtor take part in the case as another defendant.

Moreover, it should not be neglected that the undertaking of an institution in the form of money obligations in excess over a cost estimate is not a ground for refusing to hold the owner of the institution accountable on lines of vicarious liability for the institution's obligations.

In the event of winding up of an institution creditors' claims declared after the completion of the winding up cannot be met at the expense of the owner of the institution's assets.

Decision of Plenary Meeting of the Higher Arbitration Court of the Russian Federation No. 22 of June 22, 2006 on the Procedure for Redemption of Expenses in a Case of Bankruptcy <br>

The plenary meeting of the Higher Arbitration Court of the Russian Federation has offered its explanations concerning the procedure for redeeming expenses in a case of bankruptcy. For instance, courts have to take into account that where the insufficiency of debtor's assets and also the lack of or insufficiency of funding by an applicant, an insolvency practitioner or another person of bankruptcy proceedings make it impossible to further implement them than the bankruptcy case has to be terminated under Item 1 of Part 1 of Article 150 of the Arbitration Procedural Code of the Russian Federation, for instance, on the court's initiative. However, unless such circumstances impede the issuance of a ruling on termination of winding up proceeding, then case proceeding is not subject to termination. In the ruling on termination of the proceeding in this case reference should be made to the procedure for distribution of the expenses both incurred before the termination of the case and the future ones as well. Here, o ne is to bear in mind that compensation is possible for expenses deemed substantiated and necessary by the court.

Decision of Plenary Meeting of the Higher Arbitration Court of the Russian Federation No. 23 of June 22, 2006 on Certain Issues of Arbitration Courts' Application of Norms of the Budget Code of the Russian Federation<br>

The plenary meeting of the Higher Arbitration Court of the Russian Federation has prepared recommendations concerning the details of application of budget legislation norms in disputes to which a public-law entity is party.

It is explained that in cases of compensation for harm inflicted by unlawful actions of state bodies, and also in lawsuits on lines of vicarious liability against public-law entities concerning the obligations of institutions they have formed the relevant chief manager of budget funds acts on behalf of the public-law entity. In this case, the indication that defendant is a body not being the relevant chief manager of budget funds is not deemed an obstacle for hearing the case on the merits thereof. While settling disputes in lawsuits presented by a creditor of a state (municipal) institution the appropriate defendant in line of vicarious liability for the obligations of the institution is the relevant public-law entity rather than the empowered bodies thereof.

Notably, according to Item 6 of 242.2 of the Budget Code the execution of a court's judgement on collecting funds from a public-law entity at the expense of budget funds has to be accomplished by the relevant financial body within three months after the receipt of a writ of execution by the said body. Thus, a writ of execution may be presented by a claimant for enforced execution to a bailiff only if the court's decision has not been implemented at the expense of budget funds within the said three-month term.

Also some issues have been examined concerning disputes on holding public-law entities liable for the state (municipal) guarantees they have granted; on deeming cash collection instructions of state bodies in the area of enforcement as not subject to execution; on deeming as illegal decisions concerning the withdrawal of the budget funds allocated to an institution and used by it for purposes inconsistent with the terms and conditions defined for receipt thereof by the estimate of revenues and expenditures. Special attention is drawn to such category of cases as cases of collection of the damages economic entities incur in connection with the granting to certain categories of citizens of the privileges established by the legislation. It is stressed that these disputes have an economic nature, and therefore fall within the jurisdiction of an arbitration court. A procedure is defined for designating proper defendants in such cases with due regard to the amendments to legislation that have been made since Janua ry 1, 2005 concerning delineation of powers of the Russian Federation and the subjects thereof on matters of joint jurisdiction, like social protection.

Decision of Plenary Meeting of the Higher Arbitration Court of the Russian Federation No. 24 of June 22, 2006 on the Application to State (Municipal) Institutions of Item 2 of Article 1 of the Federal Law on Placing Orders for the Delivery of Goods, Performance of Works and Provision of Services for State and Municipal Needs and Article 71 of the Budget Code of the Russian Federation<br>

The plenary meeting of the Higher Arbitration Court of the Russian Federation has provided its explanations concerning the limits on and the procedure for state or municipal institutions' exercising their powers to spend the funds allocated by a cost-estimate for the purchase of goods (works, services) for the purpose of supporting their own activities.

The acquisition by budget-funded institutions for their own needs of goods, works and services for an amount not exceeding 200,000 roubles takes place under contracts concluded in the ordinary procedure in keeping with the provisions of the civil legislation. However, one is to see the difference between the agreements (contracts) concluded by an institution within the limits of funds allocated under a cost-estimate for meeting its own needs and the contracts concluded for the purpose of meeting state (municipal) needs according to the Federal Law on Placing Orders for the Delivery of Goods, Performance of Works and Provision of Services for State and Municipal Needs. For the purpose of concluding such contracts an institution has to secure the powers of a state (municipal) customer that can be conferred thereon by the relevant governmental body or municipal authority. If an institution is empowered by a governmental body to carry out the functions of a state (municipal) customer in placing orders for the del ivery of goods, performance of works and provision of services for state (municipal) needs then in this case, acting in the interests and on behalf of a public-law entity, shall be fully governed by the provisions of the Law on Placing Orders, save cases when goods (works and services) are delivered for an amount not exceeding the maximum amount allowed for settlement of accounts in cash in the Russian Federation between legal entities under a single transaction (at present it is equal to 60,000 roubles).

Decision of Plenary Meeting of the Higher Arbitration Court of the Russian Federation No. 30 of June 22, 2006 on Certain Issues of Application of Article 103(1) of the Tax Code of the Russian Federation Concerning the Regulation of Extrajudicial Procedure for Collecting Tax Sanction Amounts<br>

The plenary meeting of the Higher Arbitration Court of the Russian Federation has explained the procedure for application of Article 103.1 of the Tax Code of the Russian Federation establishing the procedure for collecting tax sanctions under a decision of a tax body. For instance, when this norm is applied the rule of Item 3 of Article 46 of the Tax Code of the Russian Federation on the limit on the term for collection of said amounts in an extrajudicial procedure is not applicable. If the tax sanction amounts not paid by the taxpayer (tax agent) voluntarily exceed the limits set by the Tax Code of the Russian Federation these amounts are collected through a judicial procedure in the observance of statute of limitations concerning the collection of tax sanctions set at six months by Article 115 of the Tax Code of the Russian Federation. If the sum of outstanding tax sanctions does not exceed the limits set by the Tax Code of the Russian Federation then they may be collected within six months by means of send ing relevant documents to a bailiff, in view of Subitem 3 of Item 1 of Article 14 of the Federal Law on Execution Proceedings. Here, while determining the starting point of the term one is to be governed by the same approach as for the starting point for counting the tax sanction collection term in a judicial procedure.

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