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Summary of Working Paper No. 105-1998

IV.3.2: Some Aspects of Foreign Trade Regime of the Russian Federation and Co-operation in the Field of International Shipping

By Alexander I. Frolov, Sea Transport Service, Moscow, Russia; Mikhail S. Khanin and Irina N. Mikhina, Soyuzmorniiproject, Moscow, Russia

The Report deals with the possible conditions for application of the principles of the General Agreement on Trade in Services (GATS, 1994) to the Russian market of sea transport services. Application of the main principle of openness calls for improvement in the administrative regulation of shipping in Russia. This is consistent with the present-day policy of Russia aimed at creating favourable conditions for development of co-operation between the Russian and foreign shipowners.

The report analyses the Russian tax legislation, foreign investments, customs tariffs, licensing, quoting and currency regulation. A separate section of the report elucidates the transition of the Russian shipping to market conditions.Thus, the above mentioned foreign economic, legal and organisational changes in the Russian Merchant Marine suggest that the policy pursued by Russia in relation to the national shipping meets basically the GATS principles and Russia may be regarded as a party to this General Agreements.The report lays special emphasis on the fact that the realisation of the GATS principles on the Northern Sea Route (NSR) will be instrumental with ever-growing openness of this route for international shipping. At the present time Russia has set up a favourable regime of the international commercial shipping along the NSR. As for the NSR the notification principle of ship admission has been established provided that these ships comply with special requirements; the ships are assisted in navigation through the NSR by the Marine Operations Headquarters with State supervision being carried out by the NSR Administration.

However application of the principle of openness will call for introduction on the NSR of an international information and exchange system to deal with the potential cargo-flows, carrying capacity of the Arctic ships freight tariffs, icebreaker and port dues. All these developments are associated with heavy expenditures of money and time under the conditions of transition to the market relations. Implementation of these arrangements can be of assistance in actual incorporation of the NSR into the global system of sea routes.