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A new Trade Bill has been proposed by the Russian Government. Mr. Putin said that the goal of the draft law is to balance relations along the entire supply chain from producer to retailer and to bring order to such a sensitive area as food trade. Paragraph 4 of the Article 1 of the draft law states that the law does not apply to the international trade activity, however, this bill could be relevant to the international commerce through Mode 3 (commercial presence in the territory of another country) in retail services. Foreign companies could be also interested in the implications for the profitability of investments into the agricultural sector, because the current law improves the producer selling conditions and clarifies the relationship between producer and retailer.
The bill contains four matters of potential interest. The first is a proposed clarification of state regulation in trade activity. The draft law includes a list of the ways the government is allowed to regulate trade activity in Russia such as anti-trust regulation, technical regulation, the state is the information provider carrying monitoring, surveillance functions, etc. The bill states that other forms of state regulation are not allowed. The draft law also prohibits the implementation any additional trade regulation by any state (inside Russia) which could limit and worsen the conditions of trade activity (Article 17). The draft law also defines the competence of the federal, state and municipal levels in regulation of trade activity in Russia. At the same time the draft law limits the government control over the trade activities by 'notifying the authorities rather than obtaining their permission'.
The second important improvement is that the law specifies the period of time during which the payment has to be made for food supplies and imposes direct ban on the use of unfair practices by buyers such as discriminating against specific producers. It is important to recall that the large gap between the prices received by agricultural producers and the prices of the food etc paid by customers in shops provided the political justification for this new "fairer" trade regulation.
Another important step up is anti-monopoly regulation included in the draft law. It contains some norms which prevent retail chains from obtaining a dominant position at the Russian retail market, which might give some space to the foreign retail networks to gain a share of the Russian market.
Fourth, an interesting point is the description of the allowed commerce promoting activities by municipal, state and federal levels. The draft law includes such forms of trade stimulation as the support of the investment projects targeted on the development of the domestic trade infrastructure as well as the government support of activities and events which stimulate domestic trade.
The law was expected to be implemented in September 2009.
The bill was adopted by the State Duma on 18 December 2009, by the Council of the Federarion on 25 December 2009 and finally was signed by the Russian President on 28 December 2009. The law enters into force on 1 February 2010.
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