April 2004
New rules outline Sakhalin border zone
Special passes required for entry, commercial activities
The Sakhalin Oblast Administration enacted regulations March 23 that fill the legal vacuum that had existed regarding the Sakhalin border zone, reports Denis Marchenko, of Russin & Vecchi’s Yuzhno-Sakhalinsk office. “The new regulations define the border zone and require passes for people and means of transport entering it, as well as for commercial and other activities within it," Marchenko explains.
The regulations outline a five-kilometer zone along certain segments of the coast of the Korsakov, Nevelsk and Aniva administrative districts, and the administrative borders (excluding population centers) of the Northern Kuril, Kuril, and Southern Kuril districts, he notes. In Korsakov district, the zone occupies the eastern shore from Cape Svobodny to Cape Aniva, and Aniva Bay from Novikovo to Cape Aniva. In Nevelsk district, the zone occupies the western shore from Shebunino to Cape Kriljon, and in Aniva district, from Kirillovo to Cape Kriljon.
The remaining districts on Sakhalin Island island, including Okha and Nogliki, are not considered border zone territory, Marchenko reports.
Pact eases entry permit system for some Japanese
Sakhalin agency to invite qualified Hokkaido representatives
The Sakhalin government and Japan's representative office in Sakhalin have signed an agreement to simplify the procedure for entry permits for some Japanese residents, reports Denis Marchenko, of Russin & Vecchi’s Yuzhno-Sakhalinsk office. The pact affects employees of the Hokkaido governor's office, the Hokkaido Governor's Representative Office on Sakhalin and their families, and other organizations helping to implement the Agreement on Friendship between Sakhalin and Hokkaido, he notes.
The late Sakhalin Gov. Igor Farkhutdinov and Hokkaido Gov. Tatsuia Hori signed that agreement in 1998, Marchenko explains.
Under the recent
agreement, the Sakhalin Oblast Administration's Committee for International, Overseas Economical and Interregional
Relations will issue invitations to qualified Japanese citizens,
he reports.
Required documents outlined for PSA tax exemptions
Decrees cover relief from property, transport taxes, duties
The Russian government has established sets of documents that investors in recent production sharing agreements (PSAs) must present when applying for exemptions from property taxes, transport taxes and customs duties, reports Rita Hoffman, of Russin & Vecchi’s Yuzhno-Sakhalinsk office. For property and transport tax exemptions, one must show “exclusive use” of the pertinent taxable item for activities established in a PSA, she explains. The customs duty exemption law requires only “use,” she notes.
The transport tax exemption can apply to “means of transport other than standard passenger vehicles smaller than buses,” she reports. She adds that government decrees in January require documentation of various sorts for each exemption category. Operators acting on behalf of taxpayers also must submit notarized powers of attorney, she reports.
Some firms must disclose owners of
1% or more
Specialized depositary, management companies covered
The Finance Ministry has issued forms on which specialized depositary and management companies must disclose all shareholders with an interest of 1 percent or more, reports Zhanna Radmaeva of Russin & Vecchi’s office in Vladivostok. “With this increase in corporate transparency, heads of specialized depositary and management companies will be liable for the adequacy of data provided to the Finance Ministry,” she stresses.
The new procedure, enacted Jan. 28, covers any specialized depositary that has entered a services agreement with the Pension Fund and management companies that have entered pension savings asset management agreements with the Pension Fund, she notes. Forms must be filed annually, by July 1 following the year covered by each report.
The public will
be able to search the identity of shareholders on the Finance Ministry’s web site, Radmaeva notes.
Rule for businesses paying simplified tax violated code
The Russian Federation’s Supreme Arbitrazh Court has overruled an order by the Ministry on Taxes and Levies regarding logbooks of income and expenses for businesses using the simplified tax system, reports Natalya Prisekina, of Russin & Vecchi’s Vladivostok office. “The repealed order (from March 2003) required the reporting of companies’ operational expenses. Thus, it required recording of all income and expenses, including those that are not necessary to calculate the single tax,” she explained.
The Supreme Arbitrazh Court ruled Jan. 22 that federal ministries do not have authority to unilaterally change the Tax Code, Prisekina said. The Court concluded that the Tax Code does not obligate entrepreneurs to record in their logbooks any economic activity that does not affect tax calculations, she notes.
Putin
restructures government, forms ‘super ministry’
New agency consolidates oil, gas, nuclear energy, construction
President Putin has announced a significant restructuring of Russian Federation government, reducing the number of ministries from 30 to 17, reports Rinat Zakirov-Ziev, of Russin & Vecchi’s Moscow office. Of special note, Zakirov-Ziev says, is creation of a “super ministry” — the Ministry of Industry and Energy — that consolidates the former ministries of Industry, Science and Technology; Energy; and Nuclear Energy (“Gosstroi’).
Viktor Khristenko, who handled the duties of prime minister after the resignation of the Kasyanov government, heads the new “super ministry,” Zakirov-Ziev reports. The reforms, announced March 9, seek increased efficiency and effectiveness within the executive branch, he explains.
He observes that
wide-scale reform of Russian/Soviet Union government also occurred
in the 1950s and 1960s, although government reverted
to pre-reform structure during the 1970s and 1980s. “This very well
may be a scenario for the on-going administrative reform in Russia as
well,” he says.
© 2004 Russin & Vecchi, LLP