1.State foreign trade regulation 2. Rules of Russian private international law applicable to international contracts

State regulation. Most important legal sources Law on principles of state regulation of foreign trade activity Custom’s Code Law on currency regulation and currency control Law on export control

Methods of state regulation 1.customs tariff regulation 2.non-tariff regulation (establishing quotas and licensing) 3.foreign trade restrictions 4. currency control

Customs tariff regulation First law on customs tariff and Custom Code – 1991, current – 1993 Main goals of tariff regulation – protection of the domestic market and stimulation of the progressive structural changes in the economy Import tariff is used as a protective measure, the average – 15%, the majority of import tariff charges are ad valorem duties. The import tariff consists of three columns: Basic rate – is applied for the goods from the countries which are granted Most Favored Nation treatment, Special rate is applied for the goods from countries enjoying preferential tariff (75% of the basic rate) Rate for the goods from countries which are not granted Most Favored Nation treatment, and for the goods of unknown origin (200% of the basic rate)

Quantitative restrictions on export and import Under the Law export and import is carried out without quantitative restrictions, however, they may be imposed by the Russian Government in exceptional cases for the following purposes: - to safeguard national security, - to fulfill obligations with a due account of the state of the domestic market, - to protect the domestic market in cases provided by the Law

Export control Law on principles of state regulation of foreign trade activity allows export control to protect the national interests involving armaments, military hardware and dual-purpose goods aimed to ensure observance of international obligations of Russian Federation with respect to non-proliferation of mass-destruction weapons and technologies for the production thereof Federal Law may introduce a monopoly on export and/or import of various kind of goods, the list of goods subject to state monopoly shall be determined by federal law. State monopoly shall be based on licensing of export and of import of the goods.

Requirements of currency legislation The requirements of the Law on currency regulation and currency control are directed at prevention of the illegal escape of currency from the country Currency control was introduced over the repatriation of currency revenue to Russia from export of goods (introduced since January 1994). The exporter and bank form the passport of the contracts where the terms of international contract are envisaged in brief. The bank is obliged not only render services in the sphere of accounts, but also to control the repatriation of currency revenue. The custom bodies require the passport of the contract with other documents for customs declaration. Currency control in the field of import transactions was introduced since 1 January The mechanism of the currency control of the import transactions is actually a mirror reflection of the mechanism of the export control. The passport of the contract is the basic documents for the control by the authorised bank through which the importer transfers the foreign currency payment for the imported goods.

Requirements of currency legislation Law on currency regulation and currency control provides the division of all currency transaction into two group: the current currency transactions and currency transactions related to the movement of capital Current currency transactions include the transfers into the RF and from the RF of foreign currency for payment for the export and import goods, works and services and for the settlement pertaining to credits for export and import transactions for a period up to 180 days Currency transactions related to the movement of capital include, in particular, direct investments and portfolio investments, granting and postponing a payment for a period more than 180 days for the export and import of goods, work and services, credits for a period more than 180 days Another basic provision of the Law – the residents may have foreign currency accounts in the authorised banks - the bank which have obtained the license for the execution of currency transactions

Russian PIL CC 1964 – contained some 13 articles Current CC – 40 articles (a draft was published in 1996, the 3 rd part was adopted in 2001, in force since 1 March 2002) Significance of creation of CIS Definition and subject matter of PIL in Russia: 1 st concept - is a part of national law, 2 nd concept – is a part of international law, 3td concept – PIL encompasses the norms of national and international law. Most specialists on PIL matters adhere the first doctrine.

Russian PIL Structure of division VI CC: 1.General provisions – art status of persons – art Law applicable to Legal status of persons – art Law applicable to property and personal non-property rights – art – 1224

Main principles for international contracts Article 1210 CC: 1.The parties to a contract may in concluding the contract or thereafter choose by agreement among them the law that is applicable to their rights and duties 2.In the absence of a such agreement, the law of the country with which the contract is most closely connected shall be applied to the contract

Main principles for international contracts 3. The law of the country with which the contract is most closely connected shall be considered to be the law of the country where the place of residence or the principal place of business of the party that conducts the performance having the decisive signification for the content of the contracts is located 4.The party that conducts the performance having the decisive significance shall be considered to be the party that is, in particular: 1)the seller – in a contract of sale, 2)the lessor – in a contract of lease, 3)the carrier – in a contract of carriage, 4)the insurer – in a contract of insurance, 5)the commission agent – in a contract of commission agency, 6)the agent – in an agency contract, 7)the licensor – in a license contract, etc. for 22 types of contract

Main principles for international contracts Ascertainment of the content of foreign law: article 1191 CC allows the court to place the burden of poof of the content of foreign law upon the parties to a business dispute