October 2004
Some Extreme North benefit requirements dropped
Amendments remove some mandatory employee benefits
As of January 1, the generous additional employment benefits for workers
in the Extreme North and Near Extreme North areas (which include Sakhalin
and much of the Russian Far East) will be reduced. According to Elena
Iourkina of our Moscow office, the obligation of employers to provide
housing and accommodation benefits has been removed entirely.
Some benefits which were obligatory for all employers are now limited
to employees of Federal institutions. Iourkina explains that the former
benefits, including vacation travel payments for workers and their families
every two years, relocation expenses and supplementary medical benefits,
will now be subject to private bargaining between employers and their
employees.
She cautions, however, that other legislation still contains references
to some of these same benefits, so employers in the Extreme North and
Near Extreme North areas will need to review laws carefully when determining
employee benefits.
Foreign organizations must register anew
New filing with tax authorities due Jan. 1
Foreign organizations registered with Russian tax authorities have until
Jan. 1 to receive new certifications or informational letters if their
current documentation was issued before Oct. 1, 2003, Elena Iourkina
reports. On Jan. 1, such registrations made before Oct. 1, 2003, will
become void, she notes.
A July 2003 order by the Ministry of Taxes and Levies applies to branches
and representative offices of foreign companies, diplomatic representatives,
foreign organizations with bank accounts in the Russian Federation, and
foreign organizations having vehicles in the Russian Federation, she
explains.
Ministry to promote economic development, trade
Agency also to oversee foreign economic activity
The Russian Federation has expanded the role of the Ministry of Economic Development and Trade, reports Olesya Mormul, of our Yuzhno-Sakhalinsk office. Among the ministry’s new duties will be analysis and prediction of social and economic development, and promotion of entrepreneurial activity (including medium and small businesses), she notes.
The new ministry also will oversee foreign economic activity and customs operations, and will set policy for property relations, bankruptcy and financial management of organizations, land relations and territorial zone administration, she adds. The Aug. 27 decision authorizes the Ministry to regulate foreign trade activity, regulate property appraisals, and conduct bidding and auctions to sell export and import quotas where applicable, she reports.
The new ministry will be responsible for investigating violations of special protective, antidumping or compensation measures that apply to imported goods, Mormul notes.
Sakhalin Energy backs gray whale study
Program aims
to minimize projects’ impact
on whale population
Sakhalin Energy and several other oil companies working on Sakhalin are continuing their joint program to study gray whales in the region, reports Evgeny Kuzmenko, of our Yuzhno-Sakhalinsk office. The program cost is more than $2 million this year, he notes.
In the program, Russian and international experts will conduct various studies of the Western Gray Whale population and develop strategies to minimize the impact of Sakhalin oil and gas projects on the whales, Kuzmenko explains. Last year, the program identified at least 10 new calves, which is the highest number of calves recorded since the studies began, he reports.
Bill would hike migration rule violation penalties
Fine for improper foreign employee use would skyrocket
A bill to toughen penalties for violating Russia’s migration laws has passed the Federal Duma, Evgeny Kuzmenko reports. The bill would increase the upper level of fines, he explains. For instance, the upper level of fine for unlawful use of foreign employees would increase from 2,000 RUR to 200,000 RUR (approximately $7,000), he notes.
In the current political climate
in the Russian Federation, the bill surely will become law soon, he
predicts. “Considering the complexity
and severity of Russian migration laws, toughening the liability without
changing the migration rules seems to be unreasonable,” he comments.
Russian Far East gets new U.S. consul
Pommersheim replaces Spratlen in Vladivostok
The U.S. Consul for the Russian Far East, Pamela Spratlen, has completed her two-year appointment and departed Vladivostok for another diplomatic position in Hawaii, reports Natalya Prisekina, of our Vladivostok office. (The last Russin & Vecchi's Newsletter reported Ms. Spratlen's suggestions for improvements in the business climate of the Russian Far East). Recently arrived John Mark Pommersheim, 40, will serve as appointed U.S. Consul General in Vladivostok for the next three years, Prisekina notes.
During his press conference with local reporters on Sept. 7, Pommersheim highlighted two prime tasks that he aims at achieving during his service — further development of economic relations between the USA and Russian Far East and implementing existing programs for citizens, Prisekina reports. Speaking about business relations between the two countries, Mr. Pommersheim noted that they had been actively developing, she says. He emphasized the energy industry, timber, machinery export and agriculture as the main spheres of present cooperation.
Prisekina observes that, although business activities in Russia are often complicated by federal laws, Mr. Pommersheim sounded optimistic, saying: "Russian laws keep improving." Mr. Pommersheim arrived in Vladivostok with his wife and three sons. In his free time he likes piloting, jogging and sailing.
R&V News
R&V
wins assignment for chapter on Russian law
Book to survey international laws on labor, employment
Russin & Vecchi has been invited to contribute the chapter on Russian
employment law for the publication, “International Labor and Employment
Law,” to be published shortly by Aspatore publishers of New York.
Readers can access the text of the chapter on Russian employment law
through the "publications" section of the Russin & Vecchi
website, www.russinvecchi.com.
© 2004 Russin & Vecchi, LLP