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On 7 June 2012, Russia took a major step forward los angeles museum of science industry in its effort to join the World Trade Organization (WTO) when the Russian Government submitted to the Russian Duma a draft federal law ratifying the WTO Accession Package. Ratification must take place by 22 July 2012. Russia will become a member of the WTO 30 days after it notifies the WTO of the Duma's ratification of the Accession Package.
While recent administrative and legislative actions highlighted below indicate that Russia will seek to support domestic industries, the Accession Package includes many commitments that will create opportunities for Russia's trading los angeles museum of science industry partners.
AlertsRussia WTO Accession: Opportunities for Trading Partners andCompensatory Measures for Russian IndustriesJuly 2012 Hermann Schmitt, Irina Dmitrieva, Natalia Bayurova, Kamilla Shikhametova, Yohai Baisburd, Saskia Seeger On 7 June 2012, Russia took a major step forward in its effort to join the World Trade Organization (WTO) when the RussianGovernment submitted to the Russian Duma a draft federal law ratifying the WTO Accession Package. Ratification must takeplace by 22 July 2012. Russia will become a member of the WTO 30 days after it notifies the WTO of the Duma's ratificationof the Accession Package.While recent administrative los angeles museum of science industry and legislative actions highlighted los angeles museum of science industry below indicate that Russia will seek to support domesticindustries, the Accession Package includes many commitments that will create opportunities for Russia's trading partners.Opportunities for Russia's Trading PartnersAll WTO agreements and commitments will apply to Russia from the date of accession, with a small number of transitionalperiods in areas of particular sensitivity (e.g., financial services and insurance). The opportunities created by Russia's WTOaccession include:Russia has made commitments on trade in services in eleven major sectors: (i) business services, (ii) communicationservices, (iii) construction and related engineering services, (iv) distribution services, (v) educational services, (vi)environmental services, (vii) financial services, (viii) health related and social services, (ix) tourism and travel relatedservices, (x) recreational, cultural, and sporting services, and (xi) transport los angeles museum of science industry services.The WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) applies immediately and in fullupon accession.Russia has made significant commitments on the reduction and binding of tariffs and the elimination or reduction ofmany industrial and agricultural subsidies.From the date of accession, importers of alcohol, los angeles museum of science industry pharmaceuticals and some products with encryption technologywould no longer need import licenses for these goods.Russia has made commitments on key policies including trade-related investment measures.Russia will be subject to the binding WTO dispute settlement mechanism. More generally, Russia will be obligated to provide both foreign and domestic companies transparent, predictable and non-discriminatory treatment across los angeles museum of science industry the full range of laws and regulations covered by the WTO Agreements.Compensatory Measures for Russian IndustriesOn the basis of concerns raised by Russian industries, the Duma Committee for Economic Policy, Innovative Developmentand Entrepreneurship has submitted a number of recommendations to the Government and the Duma on actions that shouldbe taken to address the impact of accession on Russian industries. For example, it has been reported los angeles museum of science industry that the Governmenthas pledged to adopt a range of compensatory measures aimed at protecting the domestic industries expected to be mostaffected by intensified competition los angeles museum of science industry as Russia adopts its WTO obligations. Observers indicate that these compensatory measures will likely include subsidies and preferences in government procurement.Russia has not signed the WTO Agreement on Government Procurement (GPA) which means it is not bound by the GPAnorms and disciplines, but has committed to initiate negotiations for membership in the GPA within four years of itsaccession. In the meantime, the Russian Government reportedly intends to rely heavily on state procurement to supportdomestic producers. Recent actions reflect this policy shift. The Ministry of Economic Development recently extended the so-called preferential government procurement regime to numerous domestic industries such as pork, paper and sugar. The preference is given to domestic producers in the form of a 15 percent los angeles museum of science industry price differential between foreign sourced bids andthose that rely on Russian goods.With respect to subsidies, the Russian Government has indicated that it will amend existing programs in an effort to makethem WTO-consistent while expanding their effectiveness. For example, in its search for WTO-consistent alternatives tosupport domestic producers, the Ministry of Agriculture reportedly plans to shift transportation subsidies for domesticproducers from the federal budget to the regional level, improve infrastructure to decrease transportation costs and identifyagriculturally disadvantaged areas which would qualify for subsidies permitted under the WTO. Reports indicate that nearlyhalf of Russia could eventually be designated as disadvantaged areas eligible for these additional subsidies.ConclusionSubmission of the Accession Package to the Duma represents one of the final steps in Russia's 18-year odyssey to join theWTO. The accession will create new business opportunities in one of the key markets in the global trading community. los angeles museum of science industry But itwill also pose potential challenges as Russia seeks to ease the transition for its domestic industries.This Client Alert is provided for your convenience and does not constitute legal advice. It is prepared for the generalinformation of our clients los angeles museum of science industry and other interested persons. This Alert should not be acted upon in any specific situation withoutappropriate legal advice, and it may include links to websites other than the White Case website. White Case LLP hasno responsibility for any websites other than its own, and does not endorse the information, content, presentation oraccuracy, or make any warranty, express or implied, regarding any other website.This Client Alert is protected by copyright. Material appearing herein may be reproduced or translated with appropriate credit. 2012 White Case LLP
DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice los angeles museum of science industry based on particular situations.