WORLD TRADE RESTRICTED WT/ACC/RUS/52 25 May 2005 ORGANIZATION (05-2114) Working Party on the Accession Original: English of the Russian Federation

ACCESSION OF THE RUSSIAN FEDERATION

Notification of Industrial Subsidies Granted from the Federal Budget of the Russian Federation in 2002

The following submission is being circulated at the request of the Delegation of the Russian Federation.

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WT/ACC/RUS/52 Page 2

A. TIMBER INDUSTRY

Granting of Means from the Federal Budget to Enterprises and Timber Industry Organizations for Making Inter-Seasonal Reserves of Timber, Raw Materials and Fire Wood.

1. Name of the Programme

Partial compensation from the federal budget of the expenses for interest charges under credits to timber industry enterprises for making inter-seasonal reserves of timber, raw materials, and firewood.

2. Reporting Period

Year 2002.

3. Purpose for Subsidy Granting

Making inter-seasonal reserves of timber, raw materials, and firewood.

4. Legal Framework

- Federal law No. 194 of 30 December 2001 "On the Federal Budget for Year 2002" (Article 73); - Governmental Resolution No. 616 of 22 August 2001; - Governmental Resolution No. 399 of 10 June 2002; and - Governmental Resolution No. 137 of 28 February 2002.

5. Form of Subsidizing

Partial compensation from the federal budget of the expenses for interest charges under credits received in the years 2001-2002 in Russian crediting organizations by timber industry enterprises for making inter-seasonal reserves of timber, raw materials, and firewood is exercised by granting subsidies monthly in the amount of one second of the refinancing rate (rate of discount) of the Central Bank of the Russian Federation valid on the date of credit receipt, provided that the charge for use of bank credits attracted by the organizations is not less than the amount of the subsidy granted.

6. Subsidized Enterprises and the Scheme for Subsidizing

Subsidies were granted to timber industry organizations, provided that they used the credit for the purposes mentioned.

36 enterprises were subsidized within this programme in 2002.

7. Subsidy to one product unit or in cases where it is not possible, the total sum or the annual sum of budget appropriation to such subsidy.

In total 20.641 million Rubles were appropriated within this programme.

Subsidy Amount Subsidy Recipient (million Rubles) JSC "Siiysky Forestry Complex" 0.136 JSC "Arkhangelsk TBK" 1.471 JSC "Northern Timber Industry Partnership – Timber Farm No. 3" 1.051 WT/ACC/RUS/52 Page 3

Subsidy Amount Subsidy Recipient (million Rubles) JSC "Dmitrovsky Timber Industry Farm " 0.034 LLC Timber Industry Company "Navlya" 0.062 JSC "Cherepovets Furniture Plant" 1.831 LLC "Nikolskles" 0.306 JSC "Novatorsk Timber Industry Farm" 0.348 LLC "Novatorsk Timber Processing Plant" 0.300 JSC "Totmalesexport" 0.244 JSC "Vologda Timber Chemical Plant" 0.132 JSC "Vologdalesprom Corporation" 0.523 LLC "Oudorales" 1.593 JSC "Timber Industry Company Syiktivkar Timber Sewing and Processing Plant" 0.177 LLC "Louzales" 0.447 JSC "Tulabumprom" 1.692 JSC "Kirovlesprom" 1.609 LLC "Timber Exporting Company" 0.499 LLC "Almis" 0.930 JSC "Louzsky Timber Industry Plant" 0.198 JSC "Mialskles" 0.262 LLC "Timber Industry Complex" 1.433 JSC "Ivanovomebel" 0.298 JSC Timber Farm "Nauchlesprom" 2.035 JSC "Interior" 0.224 JSC "Trading House "Orgkhim" 0.163 JSC "Lesinvest" 0.503 JSC "Toumen Plywood Plant" 0.487 JSC Timber Processing Plant "Krasny Oktyabr" 0.747 LLC "Antsiferov Timber Processing Plant" 0.523 LLC "Alatyir Paper Factory" 0.031 JSC "Cheboksary Furniture Factory" 0.014 LLC "PRESS" 0.050 LLC "Sosnovsky Plant" 0.031 JSC "Novoyeniseisk Timber Factory" 0.119 JSC "Oleninsky lespromhoz" 0.138

8. Period of Subsidy (Programme) Validity

Year 2002.

9. Statistical Data to Enable to Assess the Impact of Subsidy on Trade

No data. WT/ACC/RUS/52 Page 4

B. TEXTILE INDUSTRY

Partial compensation of the expenses for interest charges under credits received from Russian crediting organizations.

1. Name of Programme

Partial compensation from the federal budget of the expenses for interest charges under credits to light and timber industry enterprises for making seasonal purchase of raw materials and materials for production of consumer goods, technical and industrial goods.

2. Reporting Period

Year 2002.

3. Purpose for Subsidy Granting

Seasonal purchase of raw materials and materials for production of consumer goods, technical and industrial goods.

4. Legal Framework

- Federal law No. 194 of 30 December 3001 "On the Federal Budget for Year 2002" (Article 73); - Governmental Resolution No. 616 of 22 August 2001; - Governmental Resolution No. 399 of 10 June 2002; - Governmental Resolution No. 137 of 28 February 2002.

5. Form of Subsidizing

Partial compensation from the federal budget of the expenses for interest charges under credits received in the years 2001-2002 in Russian crediting organizations by light and textile industry enterprises for production of consumer goods, technical and industrial goods was exercised by granting subsidies monthly in the amount of one second of the refinancing rate (rate of discount) of the Central Bank of the Russian Federation valid on the date of credit receipt, provided that the charge for use of bank credits attracted by the organizations is not less than the amount of the subsidy granted.

6. Subsidy Recipients and the Way Subsidies Were Granted

Subsidies were granted to timber industry organizations, provided that they used the credit for the purposes mentioned.

56 enterprises were subsidized within this programme in 2002.

7. Subsidy to one product unit or in cases where it is not possible, the total sum or the annual sum of budget appropriation to such subsidy.

In total 24.5 million Rubles were appropriated within this programme:

Subsidy Amount Subsidy Recipient (million Rubles) JSC "Novy Mir" 0.7 JSC "Techotkani" 0.7 JSC "Tver Manufacturing" 0.3 WT/ACC/RUS/52 Page 5

Subsidy Amount Subsidy Recipient (million Rubles) JSC "Slavia Textiles" 1.22 JSC "Gavrilov-Yamsky Flax Factory" 0.04 LLC "Rouslana" 0.6 UME "Yartsevsk Cotton Factory" 0.04 JSC "DON-TEX" 0.84 JSC "Zalesye" 0.43 JSC "Textiles firm "Oka" 0.98 JSC "Weaving Factory "Avangard" 0.6 JSC "Shuisky Cottons" 0.85 JSC "Voskresensk-Tehnotkan" 0.96 JSC "Vyisokovsky Textiles" 0.13 JSC "Tryohgorny Manufacture" 0.63 JSC "Nyitkan-Pokrovsk" 0.5 LLC "Urals Yarn" 0.22 JSC "Khasimov Net-knitting Factory" 0.42 JSC "Cuvorovskaya Thread" 0.83 JSC "Ivanteev Knitted Wear" 0.2 LLC "Yurupinsk Knitted Wear" 0. 05 LLC "Urals Cloths" 0.2 JSC "Rodniki-Denim" 0.5 JSC "Reutov Manufacture" 0.2 JSC "Corporation "Cheboksary Cotton Factory" 0.1 JSC "Iskozh" 0.1 JSC "Ionessi" 0.5 LLC "Pobeda" 0.45 JSC "AK "Chaika" 0.1 JSC "Bolshevichka" 0.9 LLC "Toumen Furs Factory" 0.2 JSC "Angarsk Knitting Factory" 0.12 JSC "Parizhskaya Kommuna" 0.72 LLC " Knitting Enterprise "Shuttle" 0.31 JSC "Artificial Leather Plant" 0.14 JSC "Tula Knitted Wear" 0.11 JSC "Leather" 0.2 JSC "Leather-Service" 0.4 JSC "Unichel" 0.5 JSC "Morocco leather" 1.3 JSC "Spartak" 0.52 JSC "Yegorievsk-Shoes" 0.4 JSC "Chrom" 1.24 LLC "Union of Manufacturers of Vakhrushevo" 0.33 JSC Vakhrushi-Yuft" 0.53 JSC "Leather-M" 1.0 LLC "Kursk Leather" 0.9 JSC "BOKOZ" 0.2 JSC Kalita" 0.42 JSC "Yuzhuralkozha" 0.07 LLC "Knitting Factory "SAR" 0.007 JSC "Knitting Factory "SAR" 0.009 LLC "Shevro" 0.144 JSC "Russian Leather" 0.5 LLC "Sloboda Furs Enterprise "Belka" 0.2 JSC Birobyidzhan Factory "Victoria" 0.24

WT/ACC/RUS/52 Page 6

8. Period of Subsidy (Programme) Validity

Year 2002.

9. Statistical Data to Enable to Assess the Impact of Subsidy on Trade

No data. WT/ACC/RUS/52 Page 7

C. ARTS AND CRAFTS

Preservation, Revival, and Development of Arts and Crafts in Russia

1. Name of Programme

Preservation, Revival, and Development of Arts and Crafts in Russia.

2. Reporting Period

Year 2002.

3. Purpose for Subsidy Granting

Preservation, Revival, and Development of Arts and Crafts in Russia.

4. Legal Framework

- Federal law No. 194 of 30 December 2001 "On the Federal Budget for Year 2002" (Sort of expenses 290, Section 0700, Subsection 0705, Article 309); - Federal law No. 7-FZ of 6 January 1999 "On Arts and Crafts" (Article 4, paragraph 1); and - Decree of the President of the Russian Federation No. 1987 of 7 October 1994 "On Measures of State Support of Arts and Crafts", paragraph 3;

Regulations on Subsidizing Organizations Involved in Arts and Crafts (approved by Ministry of Industry and Science of the Russian Federation Order No. 115 of 14 March 2001).

5. Form of Subsidy Granting

Subsidies were granted on covering of expenses for electrical power and 50 per cent tariffs for shipment of manufactured goods by railway in the territory of the Russian Federation.

6. Subsidy Recipients and the Way Subsidies Were Granted

Subsidies were allocated by the Ministry of Industry, Science and Technologies of the Russian Federation to organizations (legal entities) involved in arts and crafts manufacture and producing goods of recognized artistic quality.

In 2002, 15 enterprises enjoyed support from the federal budget.

7. Subsidy to one product unit or in cases where it is not possible, the total sum or the annual sum of budget appropriation to such subsidy

In total 16.9 million Rubles were appropriated within this programme:

Subsidy Amount Subsidy Recipient (million Rubles) JSC "Artistic Ceramics" 0.6 JSC "Kislovodsk China-Phenix" 1. 9 JSC "Accord". Voronezh region 0.2 JSC "Works of Verbyilyk" 1. 6 JSC "Semyonovskaya Painting" 0.07 JSC "Khohloma Painting" 2.8 JSC "Pavlov Plant of Kirov Artistic Metal Works" 3.63 WT/ACC/RUS/52 Page 8

Subsidy Amount Subsidy Recipient (million Rubles) JSC "Olevs" 0.09 JSC "Oryolkeramika" 0.4 Manufacturing Factory "Завод "Pskov Potter" 0.8 JSC "Tile" 0.41 JSC "Aksinya" 1.4 JSC "Skopinsk Artistic Ceramics " 1.7 JSC "Artistic Works" 1.22 LLC"Stone Belt" 0.08

8. Period of Subsidy (Programme) Validity

Year 2002.

9. Statistical Data to Enable to Assess the Impact of Subsidy on Trade

No data. WT/ACC/RUS/52 Page 9

D. FEDERAL SPECIAL PURPOSE PROGRAMMES

Programme I

Federal Special Purpose Programme "Modernization of the Transport System of Russia"

1. Name of Programme

Modernization of the Transport System of Russia ".

The programme comprises the following sub-programmes:

- "Railway Transport"; - "Motor Roads"; - "Civil Aircraft"; - "Single System of Organization of Air Traffic"; - "Maritime Transport"; - "Internal Waterway Transport"; - "Internal Waterways"; - "Reformation of Passenger Public Transport"; - "Road Traffic Safety"; - "Informatization"; and - "International Transport Corridors".

2. Reporting Period

Year 2002.

3. Purpose of Subsidizing

Raising Balance, effectiveness, and safety of the transport system which ensured vital national interests of the Russian Federation.

4. Legal Framework

Federal law No. 194 of 30 December 2001 "On the Federal Budget for 2002"; Resolution of the Government of the Russian Federation No. 848 of 5 December 2001 "On Federal Special Purpose Programme "Modernization of the Transport System of Russia (2002-2010)".

5. Form of Subsidizing

The Programme was implemented on the basis of state contracts (agreements), concluded in the established procedure with all executers of the activities envisaged by the programme who were determined on the competitive basis.

6. Subsidy Recipients and the Way Subsidies Were Granted

The sub-programmes were carried out by enterprises, organizations and transport institutions and related branches of economy which were determined on the competitive basis under the federal law "On Tenders for Placement of Orders for Delivery of Goods, Performing of Works, Rendering of Services for State needs". WT/ACC/RUS/52 Page 10

Works for the sum of 149.9 billion of Rubles were performed under the sub-programme "Motor Roads". In 2002 works were continued on the building of Chita-Khabarovsk motor road, the circular motor road belting Saint Petersburg, "Don" motorway, "Kavkaz" motorway, Adler-Krasnaya Polyana motor road and others.

A number of activities for the sum of about 13.0 billion Rubles were performed under subprogramme "Civil Aviation" in 2002. Eleven aircrafts were delivered to air carriers of Russia for the period of one year. For the reporting period works on the reconstruction of landing strips in 14 federal airports were carried out, 4 air terminal complexes were built and reconstructed. Launched were landing strips in the airports of Yakutsk, Magadan, air terminal sector in the airport of Naltchik.

About 1.2 billion Rubles were spent under sub-programme "Single System of Organization of Air Traffic". The works were financed at one’s own expense. In 2002 launched were 3 second radar sets in the airport of Komsomolsk-na-Amure, 3 peripheral ground satellite stations in the cities of Krasnoyarsk, Irkutsk, Khabarovsk, and 1 central station in Moscow as well as a number of other objects.

The factual spending at the expense of all sources of financing under sub-programme "Maritime Transport" for one year was estimated at 22.0 billion Rubles, 8.0 billion Rubles was spent on waterside objects, and 14.0 billion Rubles on deliveries of sea vessels. One of the primary objectives was to ensure financing of the completion of construction of the nuclear-power ice-breaker named "50 Years to Victory". Launched was the first line of the railway ferry complex in the international trading port of the city of Makhachkala.

Works on 48 objects of the main waterways were performed under sub-programme "Internal Waterways" for one year. About 1,0 billion Rubles of capital investments were spent. Completed were works on the Volga-Baltic waterway, launched were gates No. 3 in the western way of the Perm floodgate.

Works on the construction and modernization of "sea-river" vessels, on the construction of barges, on technical modernization of Uyst-Donetsky and Azovsky ports were performed under sub-programme "Internal Waterway Transport". Furthermore, 50.0 million Rubles was spent on purchase of the fleet vessels. About 1.0 billion Rubles of non-budgetary investments was spent on implementing such activities.

Methods and means of automatic monitoring of the conditions and parameters of traffic were developed and implemented under sub-programme "Road Traffic Safety". Elaborated was the project-estimate documentation for the development of the "Start" automatic system of the road traffic management to be implemented in Moscow. Started were works on the construction and assembly of the launching complex. 41.5 million Rubles was appropriated for the mentioned activities from the federal budget. In 2002 the general volume of financing under the sub-programme equalled 2.0 billion Rubles.

19.0 billion Rubles was spent under sub-programme "Reformation of Passenger Public Transport" in 2002. The sum was mainly appropriated from budgets of the subjects of the Russian Federation. 12 thousand means of transport were launched into use as a result.

In 2002 work on the reformation of the federal legal basis of work of city transport was initiated under the sub-programme. In particular, the draft federal law "On the Compensation of Privileges Granted to Persons of Certain Occupation in Respect of Transport Use" was discussed and further worked upon. WT/ACC/RUS/52 Page 11

60.0 billion Rubles was spent on the development of international transport corridors under sub-programme "International Transport Corridors". The priority direction in the development of international transport corridors was establishing Euro-Asian transport corridors (North-South, Transsib) as well as carrying out of large-scale projects on the development of transport infrastructure and logistic centres and systems.

150.0 million Rubles was to be spent on carrying out of activities as envisaged by sub-programme "Informatization". However, the investment projects were not started due to scarce financial resources. No measures were taken by the state customer on ensuring financial resources for the activities envisaged by the sub-programme.

7. Subsidy to one product unit or in cases where it is not possible, the total sum or the annual sum of budget appropriation to such subsidy

Budget of the Non-Budgetary Expenses Federal Budget Subjects of the Total Means Russian Federation Capital investments 2,435.500 37,219.200 39,654.700 R&D 25.000 25.000 Other needs 37,809.864 48,613.200 86,423.064 Total volume of 40,270.364 85,832.400 126,102.764 financing In million Rubles (price reference to 2002)

8. Period of Subsidy (Programme) Validity

Years 2002-2010.

9. Statistical Data to Enable to Assess the Impact of Subsidy on Trade

Together with general improvement of sanitary conditions of the industry, relatively stable tariffs, and rise of solvent demand activities carried out under sub-programme "Civil Aircraft" ensured rise in the number of passenger air carriers by air transport by 6 per cent in 2002 as compared to that in 2001.

For the first time sub-programme "Maritime Transport" marked a rise in the volume of transportation by maritime transport by 6 per cent in 2002 as compared to that in 2001.

No data. WT/ACC/RUS/52 Page 12

Programme II

Federal Special Purpose Programme "Economic and Social Development of Indigenous Small Number Peoples of the North up to 2011"

1. Name of Programme

Programme "Economic and Social Development of Indigenous Small Number Peoples of the North up to 2011".

2. Period of Report

Year 2002.

3. Purpose of Subsidy Granting

Creation of conditions for transition of indigenous peoples to stable development on the principles of self-provision on the basis of complex development of traditional industries of management, their resource and production basis, spiritual and national and cultural development, raising the level of education, professional education, ensuring health of indigenous peoples.

4. Legal Framework

- Federal Law No. 194 of 30 December 2001 "On Federal Budget for 2002"; and - Resolution of the Government of the Russian Federation No. 564 of 27 July 2001 "On the Federal Special Purpose Programme "Economic and social Development of Indigenous Small Number Peoples of the North up to 2011".

5. Form of Subsidizing

Direct transfer of means from the federal budget, establishing privileges, creation of favourable investment climate, establishment of the mechanism of state purchases of products of traditional industries of indigenous peoples, conclusion of agreements (contracts) with investors and executers of programmed activities, elaboration of the legal basis, as well as granting privileges in respect of taxes and tariffs determined under the regional legislation, conclusion of agreements on exploration and use of mineral resources in the territories of residence of indigenous peoples, and also conclusion of leasing agreements.

6. Subsidy Recipients and the Way Subsidies Were Granted

Financing of activities envisaged by the programme was performed on the basis of state contracts (agreements) concluded by the Ministry on Matters of the Federation, National, and Migration Policy of the Russian Federation with executive bodies of the subjects of the Russian Federation and organizations. The executers of the Programme would be selected on competitive basis.

Provision with material and technical resources is envisaged through the federal contracting system on the basis of conclusion of state contracts (agreements) pursuant to the Regulations of Purchase and Delivery of Products for Federal State Needs as well as on the basis of wide use of financial leasing and direct capital establishing investments aimed at modernization of the equipment in the establishment of new enterprises and manufactures. WT/ACC/RUS/52 Page 13

Appropriations of the federal budget were aimed at building dwelling houses in the places of compact residence of indigenous small number peoples of the North, objects of the social sphere, as well as at building and reconstruction of municipal boiler-houses, objects of the production sphere of traditional industries, and purchase of equipment.

3.2 thousand metres of the dwelling area was built, the building of two schools for 1,322 people was completed, built were a boarding school for 15 people, a primary school for 22 people, a hospital for 5 beds, two delivery points, a steam-house for 10 people, a hunter’s house for 15 people, a section on meat processing with a knackers point in the village of Krasnoye of the Kamchatskaya region, a section on the processing of berries, mushrooms in the village of Mezhdureche of Hanti-Mansiysk Autonomous Region, reconstructed was the fish processing base in the village of Tyimlat of of the Kyaryak Autonomous Region.

Launched were such important energy objects as LEP-35 in the village of Sheregesh of the Kemerovskaya region, a diesel electric station in the village of Zelyony Yar of the Yamalo-Nenetsky Autonomous Region.

Work was continued on the organization and development of a chain of factories. Purchased were off-road vehicles as well as equipment and gear for fishing and hunting, refrigerators, equipment processing of products of traditional industries.

Continued was work on the improvement of the material basis of higher education institutions where indigenous peoples received education. Such work was carried out within the framework of programmes on the preparation of highly-trained specialists.

7. Subsidy to one product unit or in cases where it is not possible, the total sum or the annual sum of budget appropriation to such subsidy

Budget of the Non-Budgetary Expenses Federal Budget Subjects of the Total Means Russian Federation Capital investments 110.027 149.583 81.637 341.247 R&D Other needs 1.470 1.195 2.665 Total volume of 110.027 151.053 82.832 343.912 financing In million Rubles (in the prices referenced to 2002)

8. Period of Subsidy (Programme) Validity

Years 2002-2011.

9. Statistical Data to Enable to Assess the Impact of Subsidy on Trade

No data. WT/ACC/RUS/52 Page 14

Programme III

Federal Special Purpose Programme "Prevention and Counteraction of Socially-Related Diseases"

1. Name of Programme

Programme "Prevention and Counteraction of Socially-Related Diseases".

2. Reporting Period

Year 2002.

3. Purpose of Subsidy Granting

Reducing the sickness rate, the number of cases of becoming invalids, and the death-rate of the population, stabilization of the epidemiological situation related to socially linked illnesses on the basis of complex solution of problems of their prevention, diagnostics, treatment and rehabilitation of the diseased.

In order to ensure a complex approach to fighting socially linked illnesses and medical and sanitary aftermaths of emergency situations as well as to concentrate resources of public health on the priority directions the Programme comprised the following sub-programmes:

- "Diabetes"; - "Urgent Measures on Fighting with Tuberculosis in Russia"; - "Preventing Vaccination"; - "Urgent Measures on Preventing AIDS Spread in the Russian Federation (Anti- HIV/AIDS) "; - "Improving All-Russia Medical Service of Catastrophes "; - "On Measures of Improvement of Oncology Aid to the Population of the Russian Federation "; and - "On Measures of Prevention of Further Spread of Sexually Transmitted Diseases ".

4. Legal Framework

- Federal Law No. 194 of 30 December 2001 "On the Federal Budget for 2002"; and - Resolution of the Government of the Russian Federation No. 790 of 13 November 2001 "On the Federal Special Purpose Programme "Prevention and Counteraction with Socially Linked Illnesses (for years 2002-2006)".

5. Form of Subsidizing

State customers of the Programme i.e. the Ministry of Health of the Russian Federation (the coordinator) and the Ministry of Justice of the Russian Federation concluded agreements on purchase and procurement of products for federal state needs with all the executers of the activities envisaged by the programme who were determined on the competitive basis in pursuance with the federal law "On Tenders on Placement of Orders on the Delivery of Goods, Performance of Works, Rendering of Services for State Needs".

6. Subsidy Recipients and the Way Subsidies Were Granted

Work was continued on the organization and improvement of diabetes service under sub-programme "Diabetes". By the end of the period the service consisted of 109 diabetes WT/ACC/RUS/52 Page 15

regional and city centres, 108 divisions and rooms "Diabetes Foot", 102 rooms of retinopathy, 42 centres of "Diabetes and Pregnancy", 750 schools for education of the diseased both children and adults including parents of the diseased children. The most effective division of the diabetes service became the organization of schools of education of the diseased with diabetes. More than 18 thousand people received in-patient treatment in the Diabetes centre, 76,480 people from all over Russia received special aid in the consultation and diagnostic division of the centre.

Supplementary regional registers of the diabetics were organized in 12 subjects of the Russian Federation.

Gene-spliced insulin for the sum of 404.3 million Rubles and tablet- shaped sugar reducing preparations for the sum of 137.1 million Rubles were purchased and sent to the subjects of the Russian Federation. 3.997 million Rubles was spent on the purchase of kits for determining glycol haemoglobin.

Continued was purchase of medical multi-use thermo-containers of the large volume TM-52, medium volume TM-35, and small volume TM-8 as envisaged by sub-programme "Preventing Vaccination". The number of containers purchased equalled 900 units.

Works were carried out in the Research and Development Institute on the creation of the synthetic growth medium for obtaining pertussis cell-free preparation.

Work on the creation of two diagnosticums for diagnosing measles was started in the Research and Development Institute in 2002.

Five video clips, one educational video film, polygraph products (leaflets, booklets) were made within the framework of improvement the system of informing the population on the prevention measures as far as infections were concerned.

Pursuant to sub-programme "Urgent Measures of Counteraction Tuberculosis in Russia" a sewage collector was launched in the medical treatment institution of the Republic of Bouryatia and in the Krasnodar region, medical centres in the Sverdlovsk region and the Republic of Mordovia.

250 beds were launched in the mentioned above institutions which enabled to improve conditions of treatment of patients ill with tuberculosis in the Republic of Mordovia and the Svrdlovsk region.

In total 19 R&D works were carried out by the institutes in different regions of the country (the cities of Khabarovsk, Novgorod, Omsk, Rostov, Saint-Petersburg, Ekaterinburg, Nizhny Novgorod).

In 2002 active work was continued on the creation in the subjects of the Russian Federation of the medical centres of catastrophes, on the improvement of their structure and raising their material basis. There started working centres in 7 subjects, namely, the Republics of Udmurtiya, Kabardino-Balkariya, Bouryatia, the autonomous regions of Khanti-Mansiysk and Yamalo-Nenetsk, in the Orlov and Ulyanovsk regions.

Over 33 tons of medication for the sum of 7.0 million Rubles was delivered to the areas of emergency situations. WT/ACC/RUS/52 Page 16

7. Subsidy to one product unit or in cases where it is not possible, the total sum or the annual sum of budget appropriation to such subsidy

Budget of the Non-Budgetary Expenses Federal Budget Subjects of the Total Means Russian Federation Capital investments 354.882 354.882 R&D 19.643 19.643 Other needs 2,202.384 1,922.500 172.450 4,297.334 Total volume of 2,576.909 1,922.500 172.450 4,671.859 financing In million Rubles (in the prices referenced to 2002)

8. Period of Subsidy (Programme) Validity

Years 2002-2006.

9. Statistical Data to Enable to Assess the Impact of Subsidy on Trade

No data. WT/ACC/RUS/52 Page 17

Programme IV

Federal Special Purpose Programme "The Culture of Russia"

1. Name of Programme

Programme "The Culture of Russia".

2. Reporting Period

Year 2002.

3. Purpose of Subsidy Granting

Creating conditions for preservation of the cultural potential and cultural heritage of the country, ensuring consistency in the development of the Russian Culture parallel to supporting variety of the cultural life, cultural innovations; ensuring single cultural continuum of the country, creating conditions to enable a dialogue of cultures in the multinational country, granting equal access to cultural values for people from different territories of Russia and those coming from different social groups.

4. Legal Framework

- Federal law No. 194 of 30 December 2001 "On the Federal Budget for the Year 2002"; and - Resolution of the Government of the Russian Federation No. 955 of 14 December 2000 "On the Federal Special Purpose Programme "The Culture of Russia (years 2001-2005)" (as amended of 19 July 2002).

5. Form of Subsidizing

The Programme is implemented on the basis of state contracts (agreements) concluded in the established procedure with all executers of activities envisaged by the programme. The projects and their executers are selected on the competitive basis.

6. Subsidy Recipients and the Way Subsidies Were Granted

Two open and nine international contests in musical and choreographic art were organized under sub-programme "The Art of Russia". 40 musical festivals were held in cities and owns of Russia in the course of one year. Three large theatrical festivals were granted support.

41 activities were organized, 25 of which took place in the regions. 17 exhibitions, 11 symposiums, and some festivals were held.

The erection of six monuments were completed, works were started on the erection of a monument to M. Bulgakov in Moscow.

Financial means were allocated to staging of new plays of drama theatres. Financial support was granted to 14 theatre crews from different towns and cities of Russia for artistic tours.

In the reporting year 205 works of different genres of musical art were purchased (8 musical stage works, 49 symphonic works, 66 chamber instrumental works, 60 choir singing works, 15 popular music works, 7 wind works). WT/ACC/RUS/52 Page 18

188 articles of contemporary art were purchased upon applications of museums of Russia.

Support in the amount of 4.0 million Rubles on the printing out of 12 periodicals and 6.0 million Rubles on publishing of 41 books was granted.

A whole complex of repairs and restoration works of objects of cultural and historic heritage (church of Flore and Lavr in the Republic of Karelia, "Lobachvsky’s house" in the Republic of Chuvashiya, church of John the Baptist in the city of Kirov of the Kirov region, Emperor Alekseev’s Academy of Music in the city of Saratov) was completed under subprogramme "Cultural Heritage".

Restoration works were performed on 544 historical and cultural monuments and on 76 complexes of historical monuments. 91 activities on monitoring, registering and issuing of orders on historical and cultural monuments were held. The restoration works were performed in 67 subjects of the Russian Federation.

Financed were works on restoration of objects in the cities and towns which celebrated their foundation anniversary. Thus, restored were historical and cultural monuments in the city of Tomsk (400th anniversary), the city of Petrozavodsk (400th anniversary), the town of Kasimov in the Ryazan region (850th anniversary), the city of Pskov (1100th anniversary), the city of Saint-Petersburg (300th anniversary).

Large innovative museum exhibition projects were carried out in the course of one year. Those were first of all the exhibitions "The Golden Map of Russia", inter-museum research and development project "Pushkin and the Metropolitan Filaret of Moscow" with participation of over 40 museums of Russia. The All-Russia Museum Festival was held in Saint- Petersburg in May.

15 unique museum articles were purchased to replenish the museum fund of the country.

17 object of culture, which included 13 paintings and graphical works, 2 objects of interior of the Amber Chamber, a church bell of the 17th century from the town of Staraya Russa were brought back from abroad. A number of cultural valuables of Russian origin were returned from France, Germany, Yugoslavia, the USA with the assistance of the Russian cultural fund, namely, archive documents, certificates, unique pictures, genuine autographs.

A further modernization and resource management including computer and technical re- equipment of libraries, access to information data base via Internet, improvement of cooperative work of libraries of Russia aimed at integration of resources.

Works on the preparation of the Encyclopaedia of Culture in 5 volumes was done under Research and Development Work. Besides, new methods on early diagnosis and preventive conservation of paper damage in the archives of graphic works, manuscripts and rare books. A number of scientific conferences were held.

At the expense of state capital investments works on the construction of the branch of the State Academic Bolshoi Theatre of Russia were financed, next to completion is was the construction of the archive depository of the State Hermitage. Launched into use was the new building of the Russian National Library in Sain-Petersburg.

Investment activities were held in respect of 13 enterprises under sub-programme "Support of Polygraph and Book-Publishing in Russia" in 2002. As a result a new printing equipment was learnt and successfully used in 7 enterprises (printing houses in the cities of Archangelsk, Khemerovo, Omsk, Chelyabinsk, Saint-Petersburg, Chekhov, Barnaul). In the rest WT/ACC/RUS/52 Page 19

6 enterprises contracts were concluded on the delivery of equipment, partial payment was made (in the cities of Kurgan, Moscow, Nizhny Novgorod, Novosibirsk, Ekaterinburg).

About 700 publications in the amount of 83.59 million Rubles (69 titles) were financed under Article "Other Needs". Besides, budgetary means in the amount of 14.7 million Rubles were appropriated from the federal budget on the preparation of "The Big Russian Encyclopaedia". Continued was the financing of publishing of literature dedicated to 300th anniversary of Saint Petersburg. Financial assistance was rendered to publishing of educational materials and text-books. Special attention was given to literature on physical training and sports doing of the physically disabled and children.

7. Subsidy to one product unit or in cases where it is not possible, the total sum or the annual sum of budget appropriation to such subsidy

Budget of the Non-Budgetary Expenses Federal Budget Subjects of the Total Means Russian Federation Capital investments 1,777.500 134.080 184.490 2,096.070 R&D 23.080 0.300 23.380 Other needs 2,728.260 576.600 1,591.350 4,896.210 Total volume of 4,528.840 710.680 1,776.140 7,015.660 financing In million Rubles (in the prices referenced to 2002)

8. Period of Subsidy (Programme) Validity

Years 2001-2005.

9. Statistical Data to Enable to Assess the Impact of Subsidy on Trade

No data. WT/ACC/RUS/52 Page 20

Programme V

Federal Special Purpose Programme "Social Support of Invalids for Years 2000-2005"

1. Name of Programme

Federal Special Purpose Programme "Social Support of Invalids for Years 2000-2005".

2. Reporting Period

Year 2002.

3. Purpose of Subsidy Granting

Lowering the level of invalidity, improving social support and the level of living of invalids; raising effectiveness of state services of medicine and social expertise and rehabilitation of invalids; development of the domestic market of rehabilitation industry; improvement of state support of public unions of invalids.

4. Legal Framework

- Federal law No. 194 of 30 December 2001 "On the Federal Budget for Year 2002"; and - Resolution of the Government of the Russian Federation No. 36 of 14 January 2000 "On the Federal Special Purpose Programme "Social Support of Invalids for Years 2000-2005".

5. Form of Subsidizing

The Programme is fulfilled on the basis of state contracts (agreements) concluded in the established procedure by the Ministry of Labour and Social Development of the Russian Federation with all executers of the activities envisaged by the Programme. The executers of certain activities within the Programme are selected in the established procedure on the competitive basis.

6. Subsidy Recipients and the Way Subsidies Were Granted

Most of the financial means aimed at fulfilment of the investment part of the programme were aimed at building of 35 sites in 25 subjects of the Russian Federation. Launched were the orthopaedic shoes factory in Saint-Petersburg, prosthetic and orthopaedic enterprises in Maikopsk and Saransk. Finished were works on building and construction in the orthopaedic shoes factory in Moscow.

In 2002, 7 contracts on the performance of research and development works within the framework of the programme were fulfilled. A scientific report with recommendations on the improvement of approaches to medical and social expertise was prepared. Analysis of the structure and dynamics of disablement of all age groups in different subjects of the Russian Federation was conducted. Elaborated were scientific and methodological basics of forming of the legal basis of the State Service on Rehabilitation of the Disabled.

104 state contracts and supplementary agreements were concluded within the frame of "other needs". WT/ACC/RUS/52 Page 21

Analyzed was work of the subjects of the Russian Federation on the elaboration of various variants of the model of paediatric service of medical and social expertise. Elaborated and tested was the action model of its paediatric service.

Improved was the material and technical basis of hospitals and laboratories of scientific institutions of the subjects of the Russian Federation by equipping them with modern rehabilitation and diagnostic equipment. 25 minibuses (GAZ-32213 model) were supplied to the main centres of medical and social expertise, 224 minibuses (UAZ-2206 model) were provided to 21 subjects of the Russian Federation, and 31 minibuses (UAZ-2206 model) to 30 subjects of the Russian Federation.

Rehabilitation and educational centres for the disabled were organized on the basis of 11 secondary schools, sets of various rehabilitation and technological equipment were supplied to economic boarding colleges in the Ryazan and Orenburg regions.

5 health and resort institutions of the Ministry of Labour of Russia were equipped with the rehabilitation equipment.

25 sets of various medical equipment were sent to federal scientific and practical centres of medical and social expertise and rehabilitation of the invalids, operating such equipment would enable to raise the effectiveness of carrying out of rehabilitation and expert activities and reduce the time of stay of patients in centres. Inter alia, supplied was technical equipment to Chrilren Rehabilitation centre in Saint-Petersburg.

Assembled and adjusted was the equipment of the rooms of the Michailovsky Castle, the State Russian Museum, and the Russian Ethnographical Museum. The equipment was specially meant for ensuring easy access to the disabled.

Organized was mass production of means of transport for rehabilitation of the disabled, as well as special devices (low-floored buses for transportation of the disabled, wheel-chairs, ascending devices, simulators, mechanic therapy apparatus).

Purchased for state prosthetic and orthopaedic appliances enterprises of the Ministry of Labour of the Russian Federation of equipment for rehabilitation diagnosis of defects of locomotor system and for determining the quality of prosthesis on the basis of the programmed apparatus complexes of "DiaSled" and "DiaSled-Scan". The purchase would raise the level of production and technical potential of state prosthetic and orthopaedic enterprises and, thus, would improve the quality of servicing of patients. 15 units of sewing equipment were delivered to Groznensky prosthetic and orthopaedic enterprise for manufacturing orthopaedic shoes and medical and bondage goods.

Mastered was the manufacture of functional prosthetic appliances from modern materials and following modern technologies, of modern hearing aids. Developed was the whole range of movement appliances which had no analogues in the rest of the world (a direct-drive wheel- chair "Motor-wheel" and an off-road – tricycle which could substitute for a cycle –car for the disabled). Jointly with Bauman Moscow State Technical University the Ministry of Education of Russia and the participation of the technological centres of the USA, Japan the enterprise "Energiya" was developing a system of distance teaching of the disabled with the use of Russian satellite system, a low-floored bus with the reclining platform, a range of manual appliances-aids for steering cars of different makes and models. WT/ACC/RUS/52 Page 22

7. Subsidy to one product unit or in cases where it is not possible, the total sum or the annual sum of budget appropriation to such subsidy

Budget of the Non-Budgetary Expenses Federal Budget Subjects of the Total Means Russian Federation Capital investments 93.900 93.900 R&D 6.800 6.800 Other needs 207.520 207.520 Total volume of 308.220 308.220 financing In million Rubles (in the prices referenced to 2002)

8. Period of Subsidy (Programme) Validity

Years 2000 -2004.

9. Statistical Data to Enable to Assess the Impact of Subsidy on Trade

The nomenclature of manufactured rehabilitation devices and services rendered saw a rise from 20 to 300 units. WT/ACC/RUS/52 Page 23

Programme VI

"Improvement of the Civil Aircraft of Russia for Years 2002-2010 and the Period up to 2015"

1. Name of Programme

"Improvement of the Civil Aircraft of Russia for Years 2002-2010 and the Period up to 2015".

2. Reporting Period

Year 2002.

3. Purpose for Subsidy Granting

Ensuring production by enterprises of domestic civil aircraft for meeting of demand for such aircraft on the domestic and foreign markets; re-equipment of aircrafts for ensuring passenger and cargo transportation and aircraft works; supporting and improving scientific and technical and manufacturing potential of the domestic aircraft industry.

4. Legal Framework

- Federal law No. 194 of 30 December 2001 "On the Federal Budget for Year 2002"; and - Resolution of the Government of the Russian Federation No. 728 of 15 October 2001 "On the Federal Special Purpose Programme "Improvement of the Civil Aircraft of Russia for Years 2002-2010 and the Period up to 2015".

5. Form of Subsidizing

State Customers of the Programme concluded contracts o the purchase and delivery of products for federal state needs with all executers of the activities envisaged by the Programme, who were determined on the competitive basis as provided by the Federal law "On Tenders for Placing of Orders for the Deliveries of Goods, Performing of Works, Rendering of Services for State Needs".

6. Subsidy Recipients and the Way Subsidies Were Granted

The means were aimed at:

a) Supporting, reconstruction and technical re-equipment of the experimental airfield Federal State Unitary Enterprise "M.M.Gromov Flight-Test Institute" of the town of Zhukovsky of the Moscow Region (49.5 million Rubles, introduced were the main funds in the amount of 19.3 million Rubles, inter alia, heat supply of oil accessories, station of pipage treatment works; and b) building of Glenzhik coastal centre of climatic tests (23.0 million Rubles).

The following experimental and construction works were performed:

i) in the sphere of aircraft construction:

- engineering of the Tu-334 aircraft; - solidification of the Tu-204 and Tu-214 aircrafts; WT/ACC/RUS/52 Page 24

- modernization of the IL-96-300 aircraft, modification of the Il-96 aircraft to the cargo carrier Il-96-400T; - modernization of aircrafts which are in operation in order to bring their characteristics to compliance with international standards; - modification of IL-76D/TF to PS-90A-76; - engineering of the amphibian aircraft Be-200 and its modifications; and - works on certification of An-38 aircraft.

Apart from carrying out the above mentioned works preparations to the engineering of new generation aircrafts were started in 2002, in particular, engineering of a commuter and medium-distance trunk aircraft, a new regional aircraft;

ii) in the sphere of helicopter engineering:

- engineering of Mi-38; - engineering of Ka-32 helicopter; and - engineering and modification of Ka-226.

iii) in the sphere of engine-building:

- building of the modification of PS-90A engine (PS-90A2); building of NK-93.

iv) in the sphere of on-board equipment, accessories and systems: a new second- generation complex IKBO-200M was worked out; continued were works on complexes KSZPNO-96,-204M2 and others including works on reducing the aircraft crews to 2 people; works were carried out on the universal complex of simulators for Tu-type aircraft crews; a wide range of works was carried out on the engineering of a new generation of equipment of civil aircrafts.

v) in the sphere of creating new materials and technologies: there were developed technologies and equipment for high-speed milling of aluminium and titanium alloys; 20 certification documents were elaborated, 42 applications for patents were submitted.

vi) in the sphere of forming the layout and improving the characteristics of perspective aircrafts, their engines and systems: designed were aerodynamic sections for lift rotors and steering rotors of helicopters which significantly surpass their foreign- made counterparts (the efficiency of performance of the rotor and the aerodynamic quality of a helicopter were increased to 10-15 per cent).

vii) competitive based state contracts were concluded in 2002. They concerned systems and accessories of aircrafts and R&D and equalled 76.2 million Rubles. WT/ACC/RUS/52 Page 25

7. Subsidy to one product unit or in cases where it is not possible, the total sum or the annual sum of budget appropriation to such subsidy

Budget of the Non-Budgetary Expenses Federal Budget Subjects of the Total Means Russian Federation Capital investments 119.500 1,806.000 1,925.500 R&D 2,606.490 2,793.500 5,399.990 Other needs Total volume of 2,725.990 4,599.500 7,325.490 financing In million Rubles (in the prices referenced to 2002)

8. Period of Validity

Years 2002-2010.

9. Statistical Data to Enable to Assess the Impact of Subsidy on Trade

Economic effectiveness of fulfilment of the programme can be assessed by the dynamics of the current volumes of production in the civil aircraft sector of the aviation industry. (increase by 110 per cent in 2002 as compared to 2001 which is higher than in the overall industry), dynamics of export of civil aircraft (increase by 102.2 per cent as compared to 2001). WT/ACC/RUS/52 Page 26

Programme VII

Federal Special Purpose Programme "Energy Effective Economy"

1. Name of Programme

Federal Special Purpose Programme "Energy Effective Economy"

2. Reporting Period

Year 2002.

3. Purpose of Subsidy Granting

Fulfilment of the main provisions of the energy strategy of Russia; transition of the economy of Russia to the energy saving mode of development by means of thorough use of energy saving technologies and equipment; providing economy industries with energy carriers, lowering production costs in the energy sector including on the transport when processing and using fuel and energy resources by consumers.

4. Legal Framework

- Federal Law No. 194 of 30 December 2001 "On the Federal Budget for Year 2001", "On the Federal Budget for Year 2002"; and

- Resolution of the Government of the Russian Federation No. 796 of 17 November 2001 "On the Federal Special Purpose Programme "Energy Effective Economy" for Years 2002-2005 and for Perspective up to Year 2010" (as amended of 29 December 2001).

5. Form of Subsidizing

The fulfilment of the Programme was performed on the basis of state contracts (agreements) concluded in the established procedure with all executers of activities envisaged by the Programme, who were selected on the competitive basis.

6. Subsidy Recipients and the Way Subsidies Were Granted

The programme comprised three sub-programmes, namely, "Energy Effectiveness of the Fuel and Energy Complex", "Safety and Improvement of the Nuclear Energy", "Energy Effectiveness in the sphere of Consumption".

The following main activities were carried out under sub-programme "Energy Effectiveness of the Fuel and Energy Complex" in 2002:

- Launched were power capacities – a unit of the primary processing of oil in the volume of 200 thousand tons per year in the JSC "Komsomolsky NPZ-Rosneft"; reconstruction of the unit of the primary processing of oil AVT-5 with the raise of capacity to the volume of 300 thousand tons per year in the JSC "Lukoil- Nizhegorodnefteorgsintez"; diesel fuel hydrotreatment unit with the capacity of 1550 tons per year in the JSC "Nizhnekamsky NPZ", Oil Plant "Tatneft"; izomerization unit with the capacity of 110 thousand tons per year in the JSC "Komsomolsky NPZ- Rosneft"; asphalt production unit with the capacity of 353 thousand tons per year in the JSC "Nizhnekamsky NPZ", Oil Plant "Tatneft"; asphalt filling line with the WT/ACC/RUS/52 Page 27

capacity of 62.2 thousand tons per year in the LCC "Lukoil- Volgogradneftepererabotka"; modernization of KM-3 oils production with increasing the capacity by 50 thousand tons per year in the LCC "Lukoil- Volgogradneftepererabotka";

- Started were works on the elaboration of the projects on the construction of oilproducts pipelines "Kstovo-Yaroslavl-Kyirishi-Primorsk" and "Andreevka- Almetyevsk-Zapad" as well as works on further development of the Baltic pipeline system. Completed were works on the construction of the oil processing station "Rodionovskaya" with reservoir of 60 thousand cubic metres’

- Launched in constant use was the gaspipeline Nyuksenitsa-Arkhangelsk;

- Launched were: the first line of "Yulianovskaya" mine of the JSC "Yuzhkuzbassugol";

- Launched into operation were the first line of the "Yulianovskaya" mine of the JSC "Yuzhkuzbassugol"; a section of underground works of "Sibirginsky" mine of the JSC "Yuzhny Kuzbass", the first line of the "Konukhtinskaya-Yuzhnaya" mine of the LLC "Rover"; launched were powers in the sections of the JCS "Krasnoyarkkraiugol"; and

- Launched into use were two turbines of Moutnovskaya Geo thermal power plant in the Kamchatka region, Zelenchukskaya hydro electric power plant, Aushingerskaya hydro electric power plant. A foundation pit was made for building of the main building of Kaliningradskaya thermal power plant-2, as well as works on ensuring launch of the most significant energy capacities in Boureiskaya hydro electric power plant (the first step of the launching complex 2x185), Khabarovskaya thermal power plant-3, hydro electric power plant cascade on the River of Tolmachyova, Yuzhno- Sakhalinskaya thermal power plant-1, Vilouiskaya hydro electric power plant-3.

The following activities were carried out in respect of the flooded areas of Bogucharskaya hydro-electric power plant, Boureiskaya hydro electric-power plant, Cheboksarskaya hydro-electric power plant: launched into dwelling were 3.145 square metres of the total dwelling space, 35 flats; inhabitants of the flooded areas were re-housed; works were carried out on forest cleaning and repairing of railways and roads.

As regards sub-programme "Creating highly effective and Import Substituting Equipment and Materials for the Fuel and Energy Complex" in the reporting year construction documentation of the experimental electric unit with the use of the engine with the external heat input with the capacity of 10 kWatt based on Vankel’s engine to be used in oil-producing industry. Construction documentation was prepared, made and tested was the simulator of the portable device with the micro-computer for the testing the pump-compressor equipment by vibration parameters.

A number of activities were carried out in 2002, namely, preventive inspection and maintenance of the flare equipment, modernization of loading racks for loading of oil and oil products, introduction of modern technologies in order to decrease greenhouse gas emissions, economizing of water by using refined waste waters, using of formation waters for preserving formational pressure, elimination of aftermaths of land resources, carrying out of re- cultivation works, reconstruction of disposal facilities, building of plants and constructions on the use and recycling of oil wastes and other oil containing wastes, diagnostics, reconstruction, capital reconstruction of pipeline, etc. WT/ACC/RUS/52 Page 28

As regards sub-programme "Safety and Development of the Nuclear Energy" the following works were carried out: conducted were experimental R&D works and establishing grounds for safety and conditions of validity of licenses for launching and building of energy blocks of Nuclear Electrical Stations.

7. Subsidy to one product unit or in cases where it is not possible, the total sum or the annual sum of budget appropriation to such subsidy

Budget of the Non-Budgetary Expenses Federal Budget Subjects of the Total Means Russian Federation Capital investments 2,851.500 2,366.200 282,962.700 288,180.400 R&D 55.000 375.000 2,475.800 2,905.800 Other needs 18.500 14,490.100 14,508.600 Total volume of 2,906.500 2,759.700 299,928.600 305,594.800 financing In million Rubles (in the prices referenced to 2002)

8. Period of Subsidy (Programme) Validity

Years 2002-2005.

9. Statistical Data to Enable to Assess the Impact of Subsidy on Trade

Effectiveness of the fulfilment of the federal special purpose programme for 2002 could be assessed as follows:

- Reduction of the power consumption constituted 3 per cent in 2002; and - Fulfilment of activities envisaged by the programme ensured forward development of energy complexes with reaching of the necessary levels of extraction and production of fuel and energy resources and parallel to exercising measures on their economizing and rational use, enabled to meet the needs of the economic and social spheres with various sorts of energy resources.

Due to saving the export potential of the energy complexes significant financial inflows to the federal budget were performed (the budget effectiveness of fulfilment of programmed activities was assessed in total at 944.4 billion Rubles);

Increase in state support of energy complexes sites enabled to raise the level of fulfilment of activities under the programmes in total from 43 per cent in 2001 to 55.2 per cent in 2002. WT/ACC/RUS/52 Page 29

Programme VIII

Federal Special Purpose Programme "Social and Economic Development of the Couril Islands of the Sakhalin Region (Years 1994-2005)"

1. Name of Programme

Presidential programme "Social and Economic Development of the Couril Islands of the Sakhalin Region (Years 1994-2005)".

2. Reporting Period

Year 2002.

3. Purpose of Subsidy Granting

Creating conditions for stable development of the Couril islands in regard of geo-strategic interests of the Russian Federation, forming of the necessary infrastructure and favourable investment climate for improvement of the priority branches of economy and stimulation of fulfilment of programmes and international collaborative project in the territory of the Couril islands.

4. Legal Frameworks

- Federal law No/194 of 30 December 2001 "On the Federal Budget for Year 2002"; and - Resolution of the Government of the Russian Federation No. 872 of 17 December "On the Federal Special Purpose Programme "Social and Economic Development of the Couril Islands of the Sakhalin Region (Years 1994-2005)" (as amended of 20 December 2002).

5. Form of Subsidizing

The Programme was fulfilled on the basis of state contracts (agreements) concluded in the established procedure with all executers of activities envisaged by the Programme who were selected on the competitive basis.

6. Subsidy Recipients and the Way Subsidies Were Granted

The investment project programmes fulfilled at the expense of state capital investments include:

- Reconstruction of the "Mendeleevo" airport; - Building of the broadcasting mast in Yuzhno-Courilsk; - Organization of area digital satellite connection with the Courils; - Building of blocks of flats (3 blocks) in Yuzhno-Courilsk; and - Reconstruction of the Couril fish farm (Itourup island).

In 2002 fulfilment of 10 research and development works was envisaged, inter alia:

- "Assessment of the economic and Natural Resources potential of the Couril islands"; - "Assessment of the Resources Potential, State and Amount of Reserves of Shelf Resources, the Resources of the Continent Slope and the Coastal Zone, Analysis of WT/ACC/RUS/52 Page 30

Their Populace Structure, Determining the Economic Effectiveness of Their Use, Working out the Effective System of Monitoring of the Costal Zone of the Courils"; - "Complex Geological and Structural and Geophysical Researches in the Northern Paramushirskaya Geothermal Area"; - "Working out of the Mechanisms and Patterns of the Effective Use and Management of the Water and Biological Resources of the Couril Islands"; - "Scientific and Technical Grounds for Creating Zones of Rational Use of Nature on the Basis of a Network of Biotechnoparks in the Territory of the Couril Islands"; - "Working out of the System of Patterns, Ensuring Effectiveness Of Financial and Managing Activities of the Executers of the Federal Special Purpose Programme of the Social and Economic Development of the Couril Islands"; - "Preparing Materials for Elaboration of Drafts of the Federal and Regional Normative Legal Acts Ensuring Special Regime of Use of Natural Resources of the Coastal Zone of the Couril Islands"; - "Preparing Materials for Elaboration of Drafts of the Federal and Regional Normative Legal Acts on Stimulation of the Foreign Economic Activity and International Cooperation of the Enterprises of the Couril Islands"; - "Preparing the System of Monitoring and Forecast of the Main Natural Processes and Calamities in the Couril Islands (seismology, tsunami, landslips, torrents, volcanos)"; - "Research on the Economic, Social, Demographic, and Ecological Processes in the Couril Islands and the Establishment of the Integrated Information and Analytical System as the Basis for Support and Adoption of Decisions on Management"; and - "Scientific and Cartographic Ensuring of Development of the Territory of the Couril Islands as an Integral Part of the Information Basis of the Programmes in Order to Reduce Risks When Managing This Territory".

7. Subsidy to one product unit or in cases where it is not possible, the total sum or the annual sum of budget appropriation to such subsidy

Budget of the Non-Budgetary Expenses Federal Budget Subjects of the Total Means Russian Federation Capital investments 75.650 75.650 R&D 9.430 9.430 Other needs 218.340 314.900 533.240 Total volume of 303.420 314.900 618.320 financing In million Rubles (in the prices referenced to 2002)

8. Period of Subsidy (Programme) Validity

Years 1994-2005.

9. Statistical Data to Enable to Assess the Impact of Subsidy on Trade

The following significant results were achieved as a result of carrying out the activities envisaged by the programme:

- Increased production of processed fish products, inter alia, exported fish products – 9.3 thousand tons (per year); - Increased production of electrical power – 2.7 MgWatt; and - Establishing new working places – 196 (all in the production sector), increasing building and construction works of the investment sites. WT/ACC/RUS/52 Page 31

As compared to 2001 in 2002 the production of processed fish products increased in total by 11.9 per cent in the Courils.

An annual yearly increase rate of the export of fish products constituted 23 per cent in the Courils in 1995-2000 (as estimated in US dollars), inter alia 82.1 per cent in the Courils municipal entity. WT/ACC/RUS/52 Page 32

Programme IX

Federal Special Purpose Programme "The South of Russia"

1. Name of Programme

Federal Special Purpose Programme "The South of Russia".

2. Reporting Period

Year 2002.

3. Purpose of Subsidy Granting

Creating economic and social conditions for stable and non-conflict development of the subjects of the Russian Federation located in the south of Russia and ensuring geo-strategic interests of Russia in that region.

4. Legal Framework

- Federal law No/194 of 30 December 2001 "On the Federal Budget for Year 2002"; and - Resolution of the Government of the Russian Federation No. 310 of 29 May 2003 "On Amending the Federal Special Purpose Programme "The South of Russia" (as amended of 4 December 2003).

5. Form of Subsidizing

The Programme was fulfilled on the basis of state contracts (agreements) concluded in the established procedure with all executers of activities envisaged by the Programme who were selected on the competitive basis.

6. Subsidy Recipients and the Way Subsidies Were Granted

Works in the amount of 13.6 billion Rubles were performed in 18 objects of geo-strategic and international importance, which constitutes 52 per cent of the total volume of financial means envisaged by the programme. Works in the amount of 2.7 billion Rubles or 10.2 per cent were performed in 112 objects of federal importance. Works in the amount of 4.1 billion Rubles or 15.8 per cent were performed in 58 objects of interregional importance. Works in the amount of about 6 billion Rubles or 22 per cent of the total volume of financial means envisaged by the programme were performed in 181 objects of regional importance.

Most of the works were performed in the objects of the fuel and energy complex. 10.3 billion Rubles or 37.9 per cent o the overall volume of financial means envisaged by the programme was spent for this purpose. As regards the transport and transit complex works performed amounted to 7.5 billion Rubles of 27.5 per cent of the overall volume. 1.1 billion Rubles or 4 per cent was spent on the resort complex, 3.8 billion Rubles or 13.9 per cent was spent on the agricultural and industrial complex. Over 3.5 billion Rubles was spent on the objects of the social sphere and the engineering infrastructure.

55 objects and launching complexes were put into operation and use. Among them were: a fish factory on production of baby sturgeons in the city of Astrakhan; a cardio-centre in the Krasnodar; the first line of the city water supply conduit in Rostov-na-Donu; a diabetics centre in Yessentouki; schools in Adyigeya and Northern Osetiya, etc. WT/ACC/RUS/52 Page 33

7. Subsidy to one product unit or in cases where it is not possible, the total sum or the annual sum of budget appropriation to such subsidy

Budget of the Non-Budgetary Expenses Federal Budget Subjects of the Total Means Russian Federation Capital investments 194.900 2,283.350 11,785.600 14,263.850 R&D 3.144 3.144 Other needs 1,777.300 128.370 236.290 2,141.960 Total volume of 1,975.344 2,411.720 12,021.890 16,408.954 financing In million Rubles (in the prices referenced to 2002)

8. Period of Subsidy (Programme) Validity

Years 2002-2006.

9. Statistical Data to Enable to Assess the Impact of Subsidy on Trade

In 2001-2002 the growth rate of the key economic industries was higher in the subjects of the Southern federal district than those in Russia in general. After a long period the South of Russia took back its leading position in terms of production of many agricultural products in Russia. In 2002, 28 million tons of bread was produced which was higher than that produced in 2000 by 10.7 million tons.

Increased was production oil, gas, electric power. Indicative to dynamic improvement of the economy and the social sphere were constantly growing investments and tax charges. 143 thousand new working places appeared, 440 thousand people were placed into jobs, reducing was the gap between the living levels of the population of the Southern federal district. WT/ACC/RUS/52 Page 34

Programme X

Programme "Social and Economic Development of the Republic of Tatarstan up to Year 2006"

1. Name of Programme

Programme "Social and Economic Development of the Republic of Tatarstan up to Year 2006" Year 2002.

2. Reporting Period

Year 2002.

3. Purpose of Subsidy Granting

Stable development of the economy and reformation of the social sphere of the Republic of Tatarstan and a step-by-step introduction of the Republic to the single budgetary and legal space of the Russian Federation.

4. Legal Framework

- Federal law No. 194 of 30 December 2001 "On the Federal Budget for Year 2002"; - Resolution of the Government of the Russian Federation No. 625 of 24 August 2001 "On the Federal Special Purpose Programme "Social and Economic Development of the Republic of Tatarstan up to Year 2006";

5. Form of Subsidizing

The fulfilment of the programme envisaged granting of a subsidy by means of direct transfer of financial means, conclusion of state contracts for purchase and delivery of products, taxation privileges, leasing, special purpose subventions, and subsidies from the republican budget, credits granted by the Russian bank of development.

Executers of activities envisaged by the programme, deliverers of equipment were selected on the competitive basis in accordance with Federal Law No. 97-FZ of 6 May 1999 "On Tenders for Placement of Orders on the Delivery of Goods, Performance of Works, Rendering of Services for State Needs".

6. Subsidy Recipients and the Way Subsidies Were Granted

60 objects were launched into use under the order placed by "Tatselzhilkomhoz", 9 onjects under the order of the Ministry of Transport and Road Building of the Republic of Tatestan, 30 objects under the order placed by the Ministry of Communication of Tatarstan, 12 objects under the order of the Ministry of Health of the Republic of Tatarstan, and others. Purchased were 199 buses, 7 trolleybuses, 13 tram carriages, agricultural machinery and related spare parts, 596 tons of feed-stuffs for fish, 12.970 feed-stuffs for animals, 17.742 tons of protein an vitamin supplements for poultry, 89.252 tons of protein an vitamin supplements of premixes, ferments, feed-stuffs for cattle and swine and other activities. WT/ACC/RUS/52 Page 35

7. Subsidy to one product unit or in cases where it is not possible, the total sum or the annual sum of budget appropriation to such subsidy

Budget of the Non-Budgetary Expenses Federal Budget Subjects of the Total Means Russian Federation Capital investments R&D Other needs 11,350.434 6,134.922 11,446.710 28,932.066 Total volume of 11,350.434 6,134.922 11,446.710 28,932.066 financing In million Rubles (in the prices referenced to 2002)

8. Period of Validity of the Subsidy (Programme)

Years 2002-2006.

9. Statistical Data to Enable to Assess the Impact of Subsidy on Trade

No data. WT/ACC/RUS/52 Page 36

Programme XI

Federal Special Purpose Programme "Revival of the Economy and the Social Sphere of the Republic of Chechnya (Year 2002 and the Subsequent Years)"

1. Name of Programme

Federal Special Purpose Programme "Revival of the Economy and the Social Sphere of the Republic of Chechnya (Year 2002 and the Subsequent Years)".

2. Reporting Period

Year 2002.

3. Purpose of Subsidy Granting

Creating conditions for ensuring normal functioning of the social sphere and economy of the Republic of Chechnya.

4. Legal Framework

- Resolution of the Government of the Russian Federation No. 889 of 21 February 2001 "On the Federal Special Purpose Programme "Revival of the Economy and the Social Sphere of the Republic of Chechnya (Year 2002 and the Subsequent Years)" (as amended of 26 September, 6 December 2002, 17 February, 8 August 2003, 22 January, 3 March 2004); and - Federal law No. 194 of 30 December 2001 "On the Federal Budget for Year 2002".

5. Form of Subsidizing

Executers of activities envisaged by the programme, deliverers of equipment were selected on the competitive basis in accordance with Federal Law No. 97-FZ of 6 May 1999 "On Tenders for Placement of Orders on the Delivery of Goods, Performance of Works, Rendering of Services for State Needs".

6. Subsidy Recipients and the Way Subsidies Were Granted

In 2002 state capital investments were aimed at reconstruction of municipal and individual houses, housing and utilities infrastructure, building industry and sites, fuel handling facilities, trading and utility services sites (tailor’s shop "Trikotazhnitsya", state unitary enterprise "Chechenphoto"), houses of culture, sites of physical training and sport, of electrical communication and mail, of transport and road facilities, of small business and entrepreneurship, as well as administrative buildings of the Government of the Republic of Chechnya.

13 municipal buildings with the total space of 21.1 thousand square metres, and 1966 individual houses with the overall space of 329.3 thousand square metres were launched into use.

Launched into operation were a water intake structure, 2 forced circulation stations, 2 distributing and 48 transformer substations.

Restored were the Hydrometeorology Centre, buildings of the R&D Institute of the Russian Academy of sciences in the city of Grozny, buildings of the courts of general jurisdiction and WT/ACC/RUS/52 Page 37

buildings of officers of the court in 5 areas of the republic, justice institutions (launched were prisons for 200 people in the city of Grozny, completed were works on 3 sites of the Naurskaya penal colony), sites of the General Prosecutor’s Office of Russia, fire fighting divisions of the Ministry of Emergency Situations of Russia, and sites of force institutions (the Ministry of Internal Affairs of Russia, the Federal Security Service of Russia, the Ministry of Defence of Russia, the Federal Frontier Service of Russia, the Federal Tax Police Service of Russia).

Launched were an ambulance station and a purulent and septic centre for 150 people in the city of Grozny, an put-patient clinic in Pervomaiskaya, an precinct hospital for 50 people in the village of Benoy, and 3 sites of sanitary and epidemiological surveillance. At present, operating were 68 hospitals, 6 dispensaries, 32 out-patient hospitals, 46 out-patient clinics, and 175 feldsher’s stations.

Launched were 4 new schools, repairs ere made in 456 secondary schools, 28 evening schools, 19 polytechnic colleges, and 3 higher education institutions.

Besides, as envisaged by "other needs" means from the federal budget were spent on lodging and boarding of citizens who had a temporarily lodged status.

7. Subsidy to one product unit or in cases where it is not possible, the total sum or the annual sum of budget appropriation to such subsidy

Budget of the Non-Budgetary Expenses Federal Budget Subjects of the Total Means Russian Federation Capital investments 4,893.842 4,893.842 R&D Other needs 1,453.549 1,453.549 Total volume of 6,347.391 6,347.391 financing In million Rubles (in the prices referenced to 2002)

8. Period of Validity of Subsidy (Programme)

2002 and the subsequent years.

9. Statistical Data to Enable to Assess the Impact of Subsidy on Trade

No data. WT/ACC/RUS/52 Page 38

Programme XII

Federal Special Purpose Programme "On Reducing Divergences in the Social and Economic Development o the Regions of the Russian Federation (Years 2002-2010 and up to 2015)"

1. Name of Programme

Federal Special Purpose Programme "On Reducing Divergences in the Social and Economic Development o the Regions of the Russian Federation (Years 2002-2010 and up to 2015)".

2. Reporting Period

Year 2002.

3. Purpose of Subsidy Granting

Reducing divergences in the social and economic development of the regions of the Russian Federation, reducing the gap in terms of the main indexes of the social and economic development between more developed and least developed regions by 1.5 by 2010, and by 2 by 2015.

4. Legal Framework

- Federal law No. 194 of 30 December 2001 "On the Federal Budget for 2002"; and - Resolution of the Government of the Russian Federation No. 717 of 11 October 2001 "On the Federal Special Purpose Programme "On Reducing Divergences in the Social and Economic Development o the Regions of the Russian Federation (Years 2002-2010 and up to 2015)"

5. Form of Subsidizing

The programme was financed at the expense of the federal budget via Regional Development Fund which supported different social development investment projects on conditions of joint financing with the subject of the Russian Federation.

6. Subsidy Recipients and the Way Subsidies Were Granted

In 2002 means from the federal budget (1,958.9 million Rubles) were aimed at financing 273 sites in 41 subjects of the Russian Federation (91 sites related to the social infrastructure and 182 sites of the engineering infrastructure).

Subjects of the Russian Federation to be granted state support within the programme were recognized those whose rates, the scale, and duration of decline in production, lowering of the level of living, raise of negative tendencies in employment, demographic and ecological improvement, social care was lower than the general rates in Russia.

The Programme determined two key trends in the distribution of financial means. Those were support of social projects (education, health care, support of houses for the handicapped, etc.) and support of building and construction of sites of the linear engineering infrastructure (energy, water, heat, gas supply, and others). WT/ACC/RUS/52 Page 39

The fulfilment of activities envisaged by the programme showed the following results:

- 63 sites were launched into operation, among them 6 sites of the social infrastructure, 93 schools, 1 hospital, and 2 outpatient hospitals), 53 sites of the engineering infrastructure (20 boiler’s houses, 19 secondary gas pipelines); - 14 Disposal works were reconstructed; - 21,5 km of the sewage collector, 61.7 km of the water supply pipeline, and 1,133.2 km of the gas pipeline was built; - over 16 thousand flats were transferred to natural gas, and tens of residing areas were gas supplied; - gradually reconstructed were 82 sites of the engineering infrastructure which enabled to ensure 1,950 supplementary places in secondary schools and over 3,000 places for people (visits) in the sphere of health care for hundreds of thousands of the population in need; and - other 142 sites and activities to be performed in this respect were to b carried out in 3003 financial year.

7. Subsidy to one product unit or in cases where it is not possible, the total sum or the annual sum of budget appropriation to such subsidy

Budget of the Non-Budgetary Expenses Federal Budget Subjects of the Total Means Russian Federation Capital investments R&D 20.915 20.915 Other needs 1,958.900 1,224.600 412.300 3,595.800 Total volume of 1,979.815 1,224.600 412.300 3,616.715 financing In million Rubles (in the prices referenced to 2002)

8. Lasting Period of Subsidy (Programme)

Years 2002-2010 up to 2015.

9. Statistical Data to Enable to Assess the Impact of Subsidy on Trade

As regards the number of population living behind the poverty line a small reduction of the gap in the regions participating in the programme was observed in 2002. Thus, in 2001 the minimum figure was 22 per cent in the Tula region, and the maximum reached 65 per cent in the Ivanovo region. The gap reduced in 2002 with the figures running 21 per cent and 63 per cent, respectively. WT/ACC/RUS/52 Page 40

Programme XIII

Federal Special Purpose Programme "The Youth of Russia (Years 2001-2005)"

1. Name of Programme

The Youth of Russia (Years 2001-2005).

2. Period of Report

Year 2002.

3. Purpose of Subsidy Granting

Creating and developing of the legal, economic and organizational conditions for bringing up a feeling of citizenship in young people in the context of democracy, market economy and the legal state, self-realization of young people as active participants of changes in the modern Russian society.

4. Legal Framework

- Resolution of the Government of the Russian Federation No. 1015 of 27 December 2000 "On the Federal Special Purpose Programme "The Youth of Russia (Years 2001-2005)" (as amended of 29 May 2002); and - Federal law No. 194 of 30 December 2001 "On the Federal Budget for Year 2002".

5. Form of Subsidizing

The Programme is fulfilled on the basis of state contracts (agreements) concluded in the established procedure with all executers of activities envisaged by the Programme who are selected on the competitive basis.

6. Subsidy Recipients and the Way Subsidies Were Granted

As regards sub-programme "Sports Education and Child, Teen, and Youth Health Care in the Russian Federation" in 2002 a reconstruction of the heating system, ventilation, and coordination of the universal sports hall "Novogorsk" was completed. Built were a boiler’s house, a gas pipeline, a sewage system, and electrical networks of the heath centre in the city of Saratov, reconstructed were roofs of dwelling houses of the "Belyie Kamni" health camp in the Republic of Chuvash. Completed was the first line of the reconstruction of the engineering networks, next to finishing were works on the reconstruction and refurbishing of the men’s gymnastics training hall of the Republican Olympic Centre "Ozero Krougloye" (the Moscow region).

As regards the R&D works a Conception of the Improvement of Health and Sports Work in the Russian Federation was elaborated on the basis of secondary schools in city urban areas and youth recreation centres. Elaborated were the methodology of construction of computer technology which could consider individual gene typical characteristics in the process of selection and early specialization of young sportsmen, a complex of the scientific and technical devices for controlling the functional state of children. Extended was the financial and technical basis of the scientific and research laboratory on the problems of the adaptive physical training. WT/ACC/RUS/52 Page 41

In order to create a number of health and sports clubs, centres for working with children and teenagers living locally and to mobilize financial means from budgets of the subjects of the Russian Federation and non-budgetary sources an annual holding of the All-Russia contest for the best health and mass sports work in the area was organized, held were competitions "Leather Ball", "Golden Puck", "Earling". Such competitions were held among country yard child teams. According to the data submitted by 72 subjects of the Russian Federation 90 clubs were open in localities. Competitions on various kinds of sports were held.

All-Russia games were held among sports schools in 7 federal districts of the Russian Federation in the December of 2002. Teams from 65 subjects of the Russian Federation took part in the competitions on gymnastics, track-and-field athletics, swimming, table tennis, unarmed combat. The overall number of participants equalled 1,697 people.

In order to introduce new forms of civil and patriotic education methodological books were published upon completion of the All-Russia military and sports game final "Orlyonok", "Lessons of Courage" and the Day of Knowledge and "Methods of Education of Young Pathfinders".

Held was the meting of WWII Veterans with cadets of military schools. 600 people took part in it. Delegations from France, the UK, the USA participated in the 5th Moscow International Festival on Stunts. Held were the interregional conference "Yesterday, Today, Tomorrow" (300 participants), the 5th friendship festival of frontier military young men "Comrades in Arms" (200 participants).

8,000 people from 25 regions participated in search operations in the territories of WWII military activities in 2002.

50 labour exchanges for youngsters worked in the regions of the Russian Federation, which processed 74,700 people 20,000 of whom were assisted in finding permanent jobs.

Means from the local budgets and non-budgetary sources were attracted to the fulfilment of activities envisaged by the programme, namely, international organizations and institutions, interregional non-governmental funds and amalgamations, charity and public organizations.

7. Subsidy to one product unit or in cases where it is not possible, the total sum or the annual sum of budget appropriation to such subsidy

As regards the number of population living behind the poverty line a small reduction of the gap in the regions participating in the programme was observed in 2002. Thus, in 2001 the minimum figure was 22 per cent in the Tula region, and the maximum reached 65 per cent in the Ivanovo region. The gap reduced in 2002 with the figures running 21 per cent and 63 per cent, respectively WT/ACC/RUS/52 Page 42

Budget of the Non-Budgetary Expenses Federal Budget Subjects of the Total Means Russian Federation Capital investments 70.900 106.300 177.200 R&D 7.500 7.500 Other needs 106.920 111.500 1.600 220.020 Total volume of 185.320 217.800 1.600 404.720 financing In million Rubles (in the prices referenced to 2002)

8. Period of Programme Fulfilment

Years 2001-2005.

9. Statistical Data to Enable to Assess the Impact of Subsidy on Trade

No data. WT/ACC/RUS/52 Page 43

Programme XV

Federal Special Purpose Programme "Ecology and the Natural Resources of Russia"

1. Name of Programme

"Ecology and the Natural Resources of Russia".

The Programme comprises 11 sub-programmes:

- "Forests"; - "Water Resources and Water Objects"; - "Water Biological Resources and Aquaculture"; - "Regulating the Quality of the Environment"; - "Wastes"; - "Support of Specially Protected Natural Territories "; - "Protection of Lake Baikal and the Baikal Territory "; - "Revitalizing the Volga River"; - "Ensuring Hydro-meteorological protection of Life and Rational Use of Nature "; - "Progressive Technologies of the Cartographic and Land-Surveying "; and - "Preserving Rare and Near-Extinct ".

2. Reporting Period

Year 2002.

3. Purpose of Subsidy Granting

A balanced development of the natural raw-materials base for meeting the needs of the economy of the country in energy and fuel, mineral, timber, and water biological resources; ensuring constitutional rights of citizens to a favourable environment.

4. Legal Framework

- Federal law No/194 of 30 December 2001 "On the Federal Budget for Year 2002"; and - Resolution of the Government of the Russian Federation No. 860 of 7 December 2001 "On the Federal Special Purpose Programme "Ecology and the Natural Resources of Russia"

5. Form of Subsidizing

The Programme was fulfilled on the basis of state contracts (agreements) concluded in the established procedure with all executers of activities envisaged by the Programme who were selected on the competitive basis.

6. Subsidy Recipients and the Way Subsidies Were Granted

Most of the financing under sub-programme "Water Biological Resources and Aquaculture" were aimed at building of fish farms.

As regards sub-programme "Support of Specially Protected Natural Territories" financed was the building of the administrative building in the Baikal National Park., a laboratory building WT/ACC/RUS/52 Page 44

of the "Khakassky" Park, and the building of the information centre in the Teberdinsky National Park.

Within the capital construction for 2002 works were carried out on the building and reconstruction of the ground subsystem of the state observation service. 28 meteorological stations and 20 hydrological posts were restored and launched into operation within the frame of further restoration of observation posts.

In total, the following activities were carried out under all the sub-programmes in 2002:

- Continued were works on restoring and reconstruction of river bank protecting constructions on the rivers and water reservoirs of Russia: reconstruction of the Chernigovsky hydrostaion; elimination of the aftermaths of floods of catastrophic proportions on the rivers of Kouban, Laba, Belaya, Kourdjips; building of protection from floods of the cities of Yakutsk, Olekminsk, Lensk, (the Lena River) and Vyilyisk (the Vyilyi River); protection of the right hand coast of the town of Tyirnauza from the river of Baksan floods; building of the water supply tract of the part of outflow of the Ufa River to the Miass River in the Kyishtim-Argazi location avoiding Uvilda lake, and others; and - Finished was the building of the reservoirs on the Koumen River near the village of Tulkintsy of the Koumen district of the Kirov region; - Started was the working out of the plan of the complex use and protection of the water resources of the Lena River – a pre-project document containing systematized returns of researches and project data on the state of water resources and on water management activities aimed at improvement of water supply to the population and industry.

In 2002 building of the cartographic factory in the city of Omsk was carried out. Elaborated was the test sample "GIS Frontier-XXI" and means of data bank keeping on the ground frontiers of the Russian Federation (a complex of programme, technical and informational means and data bank keeping on the frontiers of the Russian Federation).

The dominating trend of work of R&D organizations under sub-programme "Water Biological Resources and Aquaculture" was carrying out study of the raw basis of the domestic fishery (75 per cent of budget financing), which included resources of the territorial sea, the exceptional economic zone of Russia, internal sea and freshwater natural reservoirs, zones of foreign states, which were accessible to Russia, as well as open spaces of the World Ocean. In 2002 4 projects were carried out within the R&D work. The projects had a recommendatory character on the use and protection of lake Baikal and its natural territory.

In 2002 financed were:

- State geological study and finding out of the resource potential of the perspective ground territories as well as the continental shelf of the Russian Federation, the bottom of the World Ocean and the Antarctic; - Localization and assessment of the resource potential of the undistributed fund of mineral wealth in the explored and the main areas with the purpose of filling in the reserves of the mineral raws; - Geological exploration works in order to ensure filling in the explored reserves of the mineral resources; and - State hydro-geological, engineering-geological and geo-geological filming and mapping to ensure regulation of protection of the mineral wealth and safe use of the geological environment. WT/ACC/RUS/52 Page 45

As regards sub-programme "Ensuring Hydro-meteorological protection of Life and Rational Use of Nature " works were carried out in 2002 on making repairs in office and living buildings in the ground observation network, including observation posts taking charge for observing pollution of the environment.

In accordance with the activities envisaged by sub-programme section "Education and Re- education of Staff" in 2002 education and re-education of specialists was organized in 23 divisions of the State Hydro-meteorological centre (1006 people), inter alia, 27 specialists from the CIS states, 22 people from Mongolia, and 14 people from China.

7. Subsidy to one product unit or in cases where it is not possible, the total sum or the annual sum of budget appropriation to such subsidy

Budget of the Non-Budgetary Expenses Federal Budget Subjects of the Total Means Russian Federation Capital investments 783.520 1,406.910 3,225.400 5,415.830 R&D 91.760 6.870 84.410 183.040 Other needs 10,517.880 8,237.560 18,755.440 Total volume of 875.280 11,931.660 11,547.370 24,354.310 financing In million Rubles (in the prices referenced to 2002)

8. Period of Subsidy (Programme) Validity

Years 2002-2010.

9. Statistical Data to Enable to Assess the Impact of Subsidy on Trade

No data. WT/ACC/RUS/52 Page 46

Programme XVI

Federal Special Purpose Programme "Raising Soils Fertility in Russia for 2002-2005"

1. Name of Programme

Federal Special Purpose Programme "Raising Soils Fertility in Russia for 2002-2005".

2. Reporting Period

Year 2002.

3. Purpose of Subsidy Granting

Preserving, reproduction and rational use of soils fertility, rational use of natural resources including agricultural areas and creating on this basis the conditions of raise of production of agricultural products in order to improve the food security of the country.

4. Legal Framework

- Federal law No. 194 "On the Federal Budget for Year 2002"; and

- Resolution of the Government of the Russian Federation No. 780 of 8 November 2001 "On the Federal Special Purpose Programme "Raising Soils Fertility in Russia for 2002-2005"

5. Form of Subsidy Granting

State support of agricultural goods producers by special financing of a complex of programme activities from the federal budget with the participation of the budgets of the subjects of the Russian Federation and municipal entities and means of land using farms, as well as working out of the measures of economic stimulation of the rational use and protection of land via financial, crediting, pricing and other stimulants.

6. Subsidy Recipients and the Way Subsidies Were Granted

The selection of the land using farms to be affected by building and construction and fulfilment of other programme activities was carried out by the executive authorities of the Subjects of the Russian Federation in the procedure established to comply with the legislation of the Russian Federation. A list of sites belonging to the federal property and affected by activities envisaged by the programme was determined by the executive authorities of the Subjects of the Russian Federation jointly with the specially authorized bodies on melioration of lands or interregional federal budget institutions. Most of the means from non-budgetary sources were spent on the purchase of mineral fertilizers.

9,952.5 million Rubles was spent from the non-budgetary sources for one year, inter alia, on agrochemical works -1,607.9 million Rubles and melioration works – 1,122.3 million Rubles.

In the course of 2002, 1.9 thousand hectares of field protecting lines, 2.5 thousand hectares of pasture protecting and fitoameliorative plants, and 12.9 thousand hectares of anti-erosive ravine plants were planted. WT/ACC/RUS/52 Page 47

Works on liming of soils were carried out on 380 thousand hectares, works on phosphorus spreading were carried out on 40.9 thousand hectares. 4,7 thousand hectares enjoyed gypsum fertilizing, 5.0 thousand hectares of saline soils were ameliorated.

58.0 million tons of organic fertilizers were spread, a complex of works on the extraction of peat was carried out with 0.5 million tons extracted as a result. The overall of mineral fertilizers delivered comprised 1.4 million tons.

Introduced were 0.57 thousand hectares of irrigated lands and 1.73 thousand hectares of drained lands. Reconstructed were irrigating systems on 36.5 thousand hectares and draining systems on 10.77 thousand hectares. 27 thousand hectares enjoyed cultivation and technical works.

On average, agro-technical activities were carried out to the extent of 30-50 per cent, amelioration activities were performed to the extent of 40-60 per cent.

All research works were financed on the basis of state contracts concluded with the organizations which won open tenders or upon approval by the Ministry of Economic Development and Trade of the Russian Federation concerning placement of the order with the sole executer.

The following researches were conducted under the programme in 2002:

- Worked out were scientifically verified and practical technologies of management of the soil structure, determined were the main trends and speed of its transformation; - Performed were works on establishing the agroecological basis for designing the adaptive and landscape system of land-tenure regulation and agriculture; - Determined were the trends and the speed of modification of qualitative characteristics and the productivity of the ploughed field, which had been taken out of use in different years, worked out was the forecast of their restoration and rational use; - Based on the ecologically founded levels of the humus balance of the turfy and podzol containing soils technological methods of its stabilization in field rotation of crops; and - Established was the system of the automatic ecological data collection, processing, and analysis in respect of soil fertility.

In 2002 worked out and introduced were: the technology of ecologically safe systematized use of fluid manure, manure supplies for fodder crops; low-cost technology of production of new organic and mineral fertilizers; technology of differentiated pre-sowing spread of mineral fertilizers which ensured levelling of soils fertility; soil protecting, resources saving technologies of planting of the main agricultural plants; activities ensuring saving and raising the fertility of soils on the basis of energy saving technologies of cultivating of the main agricultural plants and receiving ecologically safe products in the territories polluted with radio nuclides and in the conditions of the urban related increased pollution level; a system of recovering the potential of the soils fertility and raising the productivity of meadow estuaries, low-cost technologies of raising the productivity of the fodder crops fields with the use of chemicals; technology of agroforestameliorative landscape and ecological preparation of lands meant for agricultural use with the use of modern technologies in designing antidegradation activities.

Much attention was paid to researches aimed at biologization of land-tending, establishing the alternative system of land-tending, the system of effective reproduction of fertility of turfy and podzol containing soils when using new sorts of organic fertilizers and biological sources. WT/ACC/RUS/52 Page 48

Worked out were the parameters of soil tending machines aimed at reducing the negative effects on the soil. Given were recommendations on the use of resource saving technologies on the basis of the new machines for minimum and zero soil-tending.

Performed were works on the creation of a complex of computerized devices and new generation automatic machines to take control of the qualitative characteristics of soils and plants for the agrochemical service of the agricultural industry complex.

In 2002 the allocated financial means from the federal budget, means of the subjects of the Russian Federation, and non-budgetary sources enabled agricultural goods producers to purchase 1,422.4 thousand tons of mineral fertilizers.

7. Subsidy to one product unit or in cases where it is not possible, the total sum or the annual sum of budget appropriation to such subsidy

Budget of the Non-Budgetary Expenses Federal Budget Subjects of the Total Means Russian Federation Capital investments 163.960 163.960 R&D 40.000 40.000 Other needs 4,767.440 4,093.560 9,952.490 18,813.490 Total volume of 4,971.400 4,093.560 9,952.490 19,017.450 financing In million Rubles (in the prices referenced to 2002)

8. Period of Subsidy (Programme) Validity

Years 2002-2005.

9. Statistical Data to Enable to Assess the Impact of Subsidy on Trade

The areas of grain crops were increased practically in all regions o the Central and Southern federal districts, as well as in most regions of the Siberian federal district in 2002. Overall, they increased by 132 thousand hectares in the Central federal district, by 390 thousand hectares in the Southern federal district, and by 37 thousand hectares in the Siberian federal district.

The increase in the collection of grain crops in the Russian Federation was linked primarily to the increase in the sows of winter crops and rise of the productivity of grain crops.

As regards the weight, 19.6 quintals per 1 hectare were received as compared to 19.4 quintals per one hectare collected in 2001.

The overall increase in the collection of grain crops in the main grain producing regions of the Central, Southern, and By-Volga federal districts constituted 1.7, 2.5, and 0.5 million tons, respectively. However, the main grain producing regions of the Siberian and Urals federal districts saw a significant reduction in grain production as compared with that of the previous year (2.6 and 0.9 million tons, respectively). WT/ACC/RUS/52 Page 49

Programme XVII

Federal Special Purpose Programme "National Technological Basis" for Years 2002-2006

1. Name of Programme

Federal Special Purpose Programme "National Technological Basis" for Years 2002-2006.

2. Reporting Period

Year 2002.

3. Purpose of Subsidy Granting

Saving and further development of the national technological basis which could be able to ensure creation and manufacture of competitive scientific products following interests of priority goals of the social and economic development and national security of Russia.

4. Legal Framework

- Resolution of the Government of the Russian Federation No. 779 of 8 November 2001 "On Approving the Federal Special Purpose Programme "National Technological Basis" for Years 2002-2006" (as amended of 13 November 2002); and - Federal law No.194 of 30 December 2001 "On the Federal Budget for Year 2002".

5. Form of Subsidizing

Executers of the activities were scientific and industrial organizations selected on a competitive basis in accordance with the Federal law "On Tenders for Placement of Orders for Delivery of Goods, Performing of Works, Rendering of Services for State Needs".

6. Subsidy Recipients and the Way Subsidies Were Granted

In order to fulfil the activities envisaged by the programme 26 investment projects and 331 R&D works were conducted on a competitively selected basis in 2002.

Among the most significant results received in the course of 2002 were:

- Creation of principally new multifunctional plating with a high degree of physical, ecological, physic and chemical, exploitative characteristics and priority technologies of its putting when making spare parts and constructions of the perspective machines (new materials technology); - Working out of a technology of creation of a unified module range of hard body observation radiolocation stations of dual use (radio electronic, microwave, and acoustic and electronic technologies); and - Creation of a stand of full technological cycle of enrichment and processing of ores to the receipt of rich and mono mineral concentrates (uranium, zirconium, tantalum, niobium, titanium, rare metals) with conducting large technology tests (nuclear technologies). WT/ACC/RUS/52 Page 50

7. Subsidy to one product unit or in cases where it is not possible, the total sum or the annual sum of budget appropriation to such subsidy

Budget of the Non-Budgetary Expenses Federal Budget Subjects of the Total Means Russian Federation Capital investments 307.300 307.300 R&D 965.600 160.880 1,126.480 Other needs Total volume of 1,272.900 160.880 1,433.780 financing In million Rubles (in the prices referenced to 2002)

8. Period of Subsidy (Programme) Validity

Years 2002-2006.

9. Statistical Data to Enable to Assess the Impact of Subsidy on Trade

No data. WT/ACC/RUS/52 Page 51

Programme XVIII

Federal Special Purpose Programme "Development of the Kaliningrad Region for the Period of up to 2010"

1. Name of Programme

Federal Special Purpose Programme "Development of the Kaliningrad Region for the Period of up to 2010".

2. Reporting Period

Year 2002.

3. Purpose of Subsidy Granting

Creating conditions for stable social and economic development of the Kaliningrad region compatible to the level of development of certain countries, as well as for favourable investment climate within the fame of rapprochement of Russia and the EU countries.

4. Legal Framework

- Federal law No. 194 of 30 December 2001 "On the Federal Budget for Year 2002"; and - Resolution of the Government of the Russian Federation No. 866 of 7 December 2001 "On the Federal Special Purpose Programme "Development of the Kaliningrad Region for the Period of up to 2010" (as amended of 6 June 2002).

5. Form of Subsidizing

Executers of the main activities were enterprises and organizations of the Kaliningrad region. Executers of the activities envisaged by the programme, deliverers of equipment were selected on a competitive basis in accordance with the Federal law "On Tenders for Placement of Orders for Delivery of Goods, Performing of Works, Rendering of Services for State Needs".

6. Subsidy Recipients and the Way Subsidies Were Granted

In 2002 the programme envisaged completion of works on 53 sites, inter alia, 27 with the participation of means from the federal budget.

Works on the gas supply to the following cities and areas of the Kaliningrad region were performed at the expense of the federal budget and partial attraction of means fron non- budgetary sources and the regional budget: village of Severnaya Gora, town of Pionersky, town of Ladushkin, as well as to the Gourievsk, Zelenogradsk, Krasnoznamensk, Svetlogorsk, Nemansk, Bagrationovsk municipal city entities. Completed was the construction of gas networks in the Svetlogorsk municipal entity, the site was launched into operation.

Built were roads "Kaliningrad-Dolgorukovo" and "Yuzhny Obkhod of the city of Kalininmgrad". Security works were performed.

Built was the main sewage pumping station in the town of Svetlogorsk. WT/ACC/RUS/52 Page 52

89 units of agricultural machinery was purchased at the expense of enterprises and of the regional budget, 49 units of agricultural machinery was purchased at the expense of the federal budget.

Built were river bank protecting blocks in the location of the child sanatorium in the town of Pionersky, completed were similar works in the village of Lesnoye in the Kurshskaya Kosa. Reconstructed were protecting dikes and constructions in the city of Kaliningrad, Gourevsk, Slavsk, Polesk municipal entities of the Kaliningrad region.

Performed were works on girdling of boiler’s houses, construction of the water supply station, fire-fighting depot, and reconstruction of sewage collectors.

Performed were preparation works, ground works, concreting of walls, made was the chemicak protection of the collector, etc.

Built and reconstructed were sewage and disposal constructions in the towns of Batiysk, Gourievsk, Mamonovo, Polessk, as well as in the village of Nevsky of the Giurievsk municipal entity and the village of Yany of the Slavsk entity.

Constructed were concrete columns, arches, other works were done in the Christ the Savior Cathegral in Kaliningrad.

Re-planned was the surgery section and partially assembles was the technological equipment, connected were the electrical networks, water supply, sewage and heat supply of the Kaliningrad Regional Hospital.

7. Subsidy to one product unit or in cases where it is not possible, the total sum or the annual sum of budget appropriation to such subsidy

Budget of the Non-Budgetary Expenses Federal Budget Subjects of the Total Means Russian Federation Capital investments 4,700 854,120 858,820 R&D 1.963 1.963 Other needs 378.700 48.910 159.600 587.210 Total volume of 380.663 53.610 1013.720 1,447.993 financing In million Rubles (in the prices referenced to 2002)

8. Period of Subsidy (Programme) Validity

Years 2002-2010.

9. Statistical Data to Enable to Assess the Impact of Subsidy on Trade

No data.

______