RESTRICTED
WORLD TRADE WT/ACC/RUS/6
25October 1995
ORGANIZATION(95-3248)
Original: English
ACCESSION OFTHE RUSSIAN FEDERATION
Régime ofRegulation ofTrade inServices
Supplement totheMemorandum
ontheForeign Trade Regime oftheRussian Federation (L/7410)
A. General description ofthemarket
Theeconomic development oftheRussian Federation intherecent years ismarked bythe
growing impact oftheservices sector oftheeconomy, which presently accounts for53.5percent
ofGDP, ofwhich tradeandcatering account for12.6percent,transportation 10.5percent, finances,
credit andinsurance 10percent, communications 1.1percent(seeAnnex 1,Table 1).
Theservices sector accounts for48.1percentoftotalemployment intheRussian Federation
11.3percentwork ineducation, culture andart,9.7percentareemployed intrade, public services,
material andtechnical supplies, 7.8percentintransportation andcommunications (seeAnnex 1,
Table 2).
TheRussian Federation isanetimporter ofservices; in1994 imports (US$13,769 million)
more thandoubled thevalue ofservices exports (US$6,906 million). Major service exports included
transportation (US$3,074 million) -44.5percent oftotal service exports, tourism
(US$2,053 million -29.7percent), commercial services, andservices inagriculture, mining and
manufacturing industries (US$327.3 million -4.7percent), legal, accounting, auditing, taxation, and
marketingservices(US$297.9million-4.3percent),otherservices(US$768.5million-11.1percent).
More than80percentofimports ofservices in1994 were accounted forbythree sectors: tourism
(US$6,825 million -49.6percentoftotalservices imports), transportation services (US$2,413 million
-17.5percent), construction services (US$1,860 million -13.5percent), andother services
(US$2,302.2 million -16.7percent).
Theadjustment ofaccounting andstatistics inRussia toconform withgenerally recognized
practices isacomplex endeavour which isbeing accomplished gradually. TheGDP calculation on
thebasis ofthesystem ofnational accounts, andthebalance ofpayments inaccordance withthe
recommendations oftheInternational Monetary Fund hasbeen initiated fairly recently. Additional
information willbeprovided asdatacollection andstatistical methods improve.
B. Policies Affecting Trade inServices
(i) Evolution ofLegal regulations, rules, procedures, administrative provisions influencing
trade inservices
Theprocess ofadapting thesystem oflegalregulation oftheservices sector intheRussian
Federation totheneeds andrequirements ofthemarket economy hasresulted inasituation where new
lawsoftencoexist witholdernorms, andnewregulations arebeing introduced toachieve national policyWT/ACC/RUS/6
Page2
objectives inindividual service sectors. Thisisparticularly thecasewithrespect tothose service sectors
which werenotprovided onacommercial basisnorsubject toregulation under theprevious economic
system. Inthissituation, theRussian Federation hasrecognized theneedforspecial efforts toensure
transparency.
ItcanbeexpectedthattheregulatoryframeworkoftheRussianFederationgoverningtheservices
sector will,forsome time, besubject toaprocess offrequent adaptation andimprovement inlight
ofexperience andofprogress made inbuilding anational capacity tosupply ofservices onacompetitive
basis.
Thesupply ofservices intheRussian Federation isregulated bylaws, government decrees,
aswellasbyregional authorities.
(ii) "Horizontal" Legislation
Asinmostcountries, trade inservices intheRussian Federation isaffected bybothlawsand
regulations ofa"horizontal" nature, notpertaining toanyspecific service sector, suchasthose dealing
withforeigninvestment,temporaryentryandemploymentofpersons,aswellasthosewhicharedesigned
toregulate aspecific service sector oractivity.
Themainlegislation regulating foreign investment, istheLaw"OnForeign Investment inthe
Russian Federation" andtheDecree ofthePresident oftheRussian Federation No.1466 of
27September1993"OnImprovementofConditionsforForeignInvestment",whichhavebeendescribed
inSection 1.3.3 oftheQuestions andReplies totheMemorandum ontheForeign Trade Régime of
theRussian Federation (Document WT/ACC/RUS/2, pages 46to62).Additional information with
respect toinvestment regulations inspecific service sectors isprovided below.
Theaccess andemployment offoreign physical persons isregulated byDecrees ofthePresident
oftheRussian Federation No.847 of29April 1994"OnAdditional Measures Related totheAttraction
andUseofForeignLabourintheRussianFederation"andNo.2146of16December1993"OnAttraction
andUseofForeign Labour intheRussian Federation". TheFederal Migrant Service ofRussia issues
permits fortheentry andemployment offoreign labour andexercises control overtheuseofsuch
permits,onthebasisofproposalsbytheexecutivebodiesoftheRepublicswithintheRussianFederation,
itsterritories, regions andautonomous formations andthecities offederal importance. Suchpermits
fixspecific quotas foremployment offoreign nationals asawhole andbygroups ofprofessions.
Permits maybegranted toRussian juridical persons, toenterprises withforeign investments
operating ontheterritory oftheRussian Federation, aswellastocertain Russian andforeign natural
persons andstateless persons residing ontheterritory oftheRussian Federation foremployment of
foreign natural persons. Issuance ofpermits aresubject toaneconomic needs test.Asarule,permits
areissued forthetermofuptooneyearandmayberenewed uponpayment ofafeeforanadditional
termofuptooneyear.
Highly skilled intracorporate transferees (directors, managers andspecialists) canbeemployed
byforeign orjointventure enterprises without theestablishment ofapermit, onthebasis ofthe
confirmation oftherighttowork.
TheRussian Federation hasentered intoanumber ofintergovernmental agreements based on
theprinciples ofreciprocal employment ofcitizens, withCISmember States, Germany, Poland,
Slovakia, Switzerland, Finland andChina.Presently, 172thousand foreign citizens from107countries
work intheterritory oftheRussian Federation.WT/ACC/RUS/6
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(iii) Licensing
Thesupply andquality ofservices incertain sectors issubject todirect administrative regulation
through licensing ofspecific types ofactivities, standardization andcertification ofservices, regulation
ofprices within legally determined norms andlimits, aswellastoenforce anti-monopoly measures.
(Alistoflawsandregulations applied inrelation toservices iscontained inAnnex 2).
Licensing ofspecific types ofactivity, including intheservices sector, isexecuted onthebasis
oftheRegulation oftheGovernment oftheRussian Federation dated 24December 1994No.1418 "On
Licensing Specific Types ofActivity". Licences aregranted based onobjective andtransparent criteria.
TheRegulation "OnLicensing" setsouttheprocedure fortheissuance oflicences, thelistsofthose
types ofactivity subject tolicensing andspecifies those federal executive organs, andspecial entities
authorized toissue licences onbehalf ofthose organs.
Thislistincludes maritime, inland waterway, airandlandtransport ofpassengers andfreight,
education services, international tourism, specific types ofconstruction, engineering, urban planning
andrelated activities, architectural services, securities andcommodity trading, launching ofspace
vehicles, medical services, ritual andrealty services. Services notincluded inthislistgenerally do
notrequire licences.
However, certain service sectors areregulated byspecial federal lawsandnormative actsof
thePresident oftheRussian Federation. Thelicensing ofbanking services isdetermined bytheLaw
"OnBanks andBanking Activity"; licensing ofnon-State organizations torender paidservices aimed
atcitizens 'employment bytheLaw"OnPopulace Employment", licensing ofcommunications services
bytheLaw"OnCommunications", licensing ofinsurance services bytheLaw"OnInsurance".
Inaccordance withthestatutes ofthefederal organs oftheexecutive power approved bythe
Government oftheRussian Federation, Stateregulation inthesphere ofservices andrelated areas can
beperformed bythefollowing governmental bodies:
Ministry ofCommunications;
Ministry ofConstruction;
Ministry ofEducation;
State Committee onHigher Education;
Ministry ofEnvironment Protection andNatural Resources;
Ministry ofFinances;
Ministry ofHealth CareandMedical Industry;
State Committee onPhysical Culture andTourism;
Ministry ofCulture;
Federal Service onTelevision andRadio Broadcasting;
Ministry ofRailTransportation;
Ministry ofTransport;
Committee onCinematography;
Federal Service OnInsurance Supervision.
(iv) Judicial, Arbitral andAdministrative Tribunals orProcedures providing forthereview
of,orremedies inrelation toadministrative decisions affecting trade inservices
Inaccordance withArticle 46oftheConstitution oftheRussian Federation eachnatural and
juridical person isguaranteed legaldefense ofhisrights andfreedoms. Thedecisions andaction (or
lackofaction) oforgans ofstatepower, organs ofregional administration, public associations andWT/ACC/RUS/6
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officials canbeappealed incourt. Courts andarbitral tribunals areauthorized torevise administrative
decisions affecting trade inservices. Thedecision ofanadministrative organ canbeappealed either
toahigher administrative organ ortoacourt.
Inconformity withItem2ofArticle 22oftheArbitration Code ofProceedings oftheRussian
Federation, disputes withrespect tonon-normative actsofstateorgans aswellasother organs not
conforming withlawandother normative legalactsaredealtwithbyArbitration tribunals.
(v) Qualification Requirements andProcedures, Technical Standards, Licence and/or
Registration Requirements InRegard ToRendering Services.
Work isunder waycurrently intheRussian Federation onstandardization andcertification
ofservices onthebasisoflaws"OnProtection ofConsumers 'Rights", "OnCertification ofProduction
andServices" and"OnStandardization", which cover suchaspects as:
- elaboration ofstatestandards inregard toservices;
- harmonization ofRussian standards withinternational andforeign standards;
- incorporation ofrequirements instandards stipulating security ofrendered services
toconsumers;
- introduction ofstandard methods ofcontrol andtesting ofservices;
- application ofstandards ofseries ISO9000 forservices certification.
Thedevelopment ofState standards onservices iscarried outinsixtechnical committees on
standardization, including thedevelopment ofstandards ontourism andhotelservices, public catering,
drycleaning, maintenance andrepair ofautomotive technology, consumer electronic andradiodevices,
transportation services. Tenstatestandards andrules oftheircertification havebeendeveloped for
aforementioned services. Work hasbegun onthestandardization andcertification ofbanking, insurance
andmedical services.
(vi) Provisions Regulating Existence andActivity ofMonopolies andServices Suppliers With
Exclusive Rights;
Theexistence andfunctioning ofmonopolies orexclusive suppliers ofservices isregulated
bytheLaw"OnCompetition andLimitation ofMonopolist Activity onCommodity Markets" of
22March 1991. TheFederal LawoftheRussian Federation "OnNatural Monopolies" adopted by
theStateDuma inJuly1995regulates theactivity ofnatural monopolies incertain areas, particularly
pipeline transportation ofoil,petroleum products andgas,railtransport, services oftransport terminals
(ports, airports). Stateregulation inthespheres ofnatural monopolies iseffected byestablishing fixed
orceiling prices (tariffs), aswellasbyproviding essential information toconsumers, and/or determining
theminimal leveloftheirprovision.
TheAnti-monopoly Committee oftheRussian Federation executes control ofobservance of
antimonopoly legislation.
(vii) Provisions Relating ToSafeguard Measures InTrade InServices
Nospecific legislation hasyetbeendrawn upforemergency safeguard measures ontrade in
services. TheRussian Federation willapply safeguard measures inaccordance withtheresults ofthe
negotiations provided forinArticle X:1ofGATS.WT/ACC/RUS/6
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(viii) Provisions Relating ToInternational Transfers AndCurrent Payments InServices
Inaccordance withArticle 9,Chapter 1oftheLawoftheRussian Federation of9October 1992
"OnCurrency Regulation andCurrency Control", there arenolimitations oncurrent currency
transactions made byresidents. Such operations include:
(a) transfers offoreign currency toandfromtheRussian Federation toeffect immediate settlement
ofpayments onexport\import ofgoods andservices, aswellastosettle credit forexport\import
operations foraperiod ofnotexceeding 180days;
(b) receipt andgranting offinancial credits foratermnotexceeding 180days;
(c) transfers toandfrom theRussian Federation ofinterest, dividends andother revenues on
deposits, investments, credits andother transactions related tocapital movement;
(d) non-commercial transfers toandfrom theRussian Federation, including transfers ofwages,
pensions, alimonies, heritage andother similar operations.
(ix) Provisions Relating ToCapital Transactions Affecting Supply ofServices
Inaccordance with Article 6ofChapter 11oftheLaw oftheRussian Federation of
9October 1992 "OnCurrency Regulation andCurrency Control" currency transactions related to
movement ofcapital byresidents areregulated bytheCentral BankoftheRussian Federation. Currency
transactions related tothemovement ofcapital, covered byArticle 10ofSection 1oftheaforementioned
Law, include:
(a) direct investments, e.g.contribution offunds totheauthorized capital ofenterprises withthe
purpose ofderiving revenues andexercising therighttoparticipate inenterprise management;
(b) portfolio investments, oracquisition ofsecurities;
(c) transfers forthepayment oftheproperty righttobuildings, constructions andother property,
including thelandanditssubsoil, which under existing legislation ofthecountry areconstrued
asrealestate, aswellasother rights torealestate;
(d) granting andreceipt ofthedeferment ofpayment fortheexport andimport ofgoods and
services, forterms which exceed 180days;
(e) extension andreceipt offinancial credits forterms exceeding 180days;
(f) anycurrency transactions other thancurrent transactions.
TheBank ofRussia hasestablished thebasic provisions ofregulation offoreign exchange.
Licences arerequired foreffecting currency transactions related tomovement ofcapital .
(x) Provisions relating totheprocurement bygovernment agencies ofservices
TheRussianFederationhopestoparticipateinthenegotiationsforeseeninArticleXIIIofGATS.
Theinformation submitted byWTO members inthatcontext willguide theRussian Federation in
preparing aresponse under thisheading.
(xi) Provisions concerning anyform ofaid,grant, domestic subsidy, taxincentive orpromotion
scheme affecting trade inservices
Theconcept ofsubsidies totradeinservices hasnotyetbeensufficiently defined. TheRussian
Federation willfollow closely thework carried outunder Article XVofGATS, andtheinformation
submitted byWTO members inthatcontext willguide theRussian Federation inproviding aresponse
under thisheading.WT/ACC/RUS/6
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C. Information onSpecific Sectors
(a) Professional services
(i) Legal services
Pursuant totheprovision onlicensing activities related topaidlegalservices intheterritory
oftheRussian Federation approved bytheDecree oftheGovernment oftheRussian Federation No.344
of15April 1995, licences areissued bytheMinistry ofJustice oftheRussian Federation andbythe
juridical organs ofthesubjects oftheRussian Federation, which arealsoauthorized tocontrol the
observance oflicence conditions.
Licensing isnotrequired forlegalservices provided within thestructure ofenterprises. Certain
types oflegalactivities, which aresetoutinthelegislation oftheRussian Federation andthenormative
actsofthePresident oftheRussian Federation require specific procedure oflicensing (e.g.notarial
activities).
Foreign legalfirms andforeign lawyers providing paidlegalservices ontheterritory ofthe
Russian Federation receive licences exclusively fromtheMinistry ofJustice oftheRussian Federation.
Aperson whohasobtained adiploma from aforeign stateinhigher legaleducation hastheright to
render paidlegalservices consultations onthelegislation ofthestatethatissued thediploma.
TheMinistry ofJustice hasissued more than300licences.
(ii) Accounting, auditing andbookkeeping services
Government regulation ofthissector iscarried outbythePresidential Commission onAuditing
Activity. Thebasiclegaldocuments applicable inthisareaaretheDecree ofthePresident oftheRussian
Federation of24October 1994 "OnSpecifying theDates ofHolding Events onRegulating Auditing
Activity intheRussian Federation" andtheRegulation oftheGovernment oftheRussian Federation
of5January 1995No.15, according towhich allnatural andlegalpersons performing auditing services
should receive licences confirming theirrighttoconduct suchactivity.
Licences areissued bytheappropriate departments oftheMinistry ofFinance, theBank of
Russia orRosstrakh (depending onthespecialization ofaccounting andauditing firms).
According totheFederal LawFZ-4 "OntheAccounting Chamber oftheRussian Federation",
accounting andauditing services onaccount transfers related totheformation andspending ofmeans
ofthefederal budget areassigned totheChamber which isanorgan ofstatefinancial control.
About3,000accountingandauditingfirms,includingtheleadingforeigncompanies(theso-called
'bigsix'.)operate intheRussian Federation.
(iii) Architectural Services
Inaccordance with theRegulation oftheGovernment oftheRussian Federation of
24December 1994No.1418 "OnLicensing Specific Types ofActivity", theprovision ofarchitectural
services isgoverned bylicences granted bytheMinistry ofConstruction, (together withtheUnion
ofArchitects), toRussian natural andjuridical subjects. Foreign firms acting inthissector ofservices
andregistered asRussian juridical persons aregranted national treatment without anylimitations. The
legislation regulating services inarchitectural areainRussia contain noprovisions incompatible with
themost favoured regime.WT/ACC/RUS/6
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(iv) Urban planning andlandscape architecture
According totheRegulation oftheGovernment oftheRussian Federation of24December 1994
"On Licensing Specific Types ofActivity" thefollowing services aresubject tolicensing:
- services relating totownplanning andconstruction documentation, (those licences aregranted
bytheMinistry ofConstruction);
- services relating totheoperation ofengineering systems ofcitiesandsettlements (those licences
areissued bylocalauthorities); and
- services relating tomaintenance, conservation andrestoration ofthecultural heritage (such
licences areissued bytheMinistry ofCulture oftheRussian Federation, iftheobjects arelisted
intheroster ofcultural monuments offederal value, andbythelocalauthorities ifthecultural
monuments areincluded inproper locallists).
(v) Research andDevelopment Services
AccordingtotheRegulationoftheGovernmentoftheRussianFederationof24December1994,
No.1418 "OnLicensing Specific Types ofActivity", statelicensing isrequired torender services on
purposes ofcarrying outresearch andexperimental anddesign works inthefollowing areas:
- development ofarms, military technology andarmaments (licences aregranted bytheState
Committee onDefense Industries);
- research onactive impact onhydrometereological andgeophysical processes andphenomena;
- hydrometeorlogical, oceanographic, heliogeophysical research andwork onmonitoring
environment pollution, intheorder laiddown intheRegulation oftheGovernment ofthe
Russian Federation of7August 1995, No.787.
Additionally, enterprises andorganizations thatreceived anorder forresearch anddesign of
armsandmilitary technology from aforeign partner, should receive permission inadvance fromthe
Ministry ofDefense. There arenoother limitations forcarrying outresearch inRussia.
(vi) Services Relating toRealEstate
Inconformity with theRegulation oftheGovernment oftheRussian Federation of
24December 1994, "OnLicensing Specific Types ofActivity", operation ofrealestate firms islicensed
bytheorgans ofexecutive bodies oftheregional governments oftheRussian Federation.
Forinstance, inMoscow, amajor centre ofrealestate, licences aregranted bytheLicence Chamber
orbytheCentre ForthePromotion ofHousing Reform inMoscow inconformity withtheRegulation
oftheGovernment oftheRussian Federation of4October, 1994, No.PM-885. Atthepresent time,
286firms, including foreign companies, havelicences inMoscow.
(vii) Rental/Leasing Services Without Operators
According totheRegulation oftheGovernment oftheRussian Federation of24December 1994
No.1418, activities ofleasing companies inRussia operate under licences granted bytheMinistry of
Economy oftheRussian Federation. Presently, theNational Russian Association ofLeasing Companies
unites 18firms, and20companies more function beyond itsframework.WT/ACC/RUS/6
Page8
(b) Other Services Relating toBusiness Activity
(i) Advertising Services
Thebasic document regulating theadvertising market istheFederal Law FZ-108 "On
Advertisement" of18July1995. Thefunctions ofstateregulation ofthissector which areconfined
tomonitoring theaccuracy ofadvertisement andtheabsence ofmisleading information havebeen
assigned totheState Committee onAnti-Monopoly Policy.
Presently, thissector ofservices inRussia comprises allmajor world advertising agencies,
theso-called BigTen. Association ofAdvertising Agencies inRussia joined theInternational Code
ofAdvertising Activity in1995.
(ii) Services Relating toMining Industry
Inaccordance with theRegulation oftheGovernment oftheRussian Federation of
24December 1994No.1418, theCommittee oftheRussian Federation onGeology andUseofNatural
Resources (Goskomnedra) thefollowing activities require licences:
- geological andsurvey works, compilations andpublication ofgeological maps (including
electronic anddigital);
- water welldrilling (excluding thermal ones) andgeological boring onnatural resources;
- geophysical (including gravimetric) works oninvestigation oftheearth entrails.
InconformitywiththeRegulationoftheGovernmentoftheRussianFederationof25April1995
no.410,mining services outside thecontinental shelfareregulated bytheGoskomnedra andbythe
Ministry ofForeign Affairs oftheRussian Federation.
Inaddition, inconformity withtheFederal Law"OnUseofMineral Wealth", services are
issued fortheexploitation ofthesubsoil. Goskomnedra ofRussia established in1993-1994 anational
serviceforlicensingexploitationofsubsoilwhichconductedauctioningoflicences.Theauctionresulted
intheissuance of8,530 licences, ofwhich 206were granted toforeign companies.
(iii) Maintenance andRepair ofEquipment
Thefollowing types ofservices arelicensed inthissector:
- production, realization andmaintenance ofmedical technology (licences issued bytheMinistry
ofHealth CareandMedical Industry oftheRussian Federation);
- manufacture, maintenance andrealization ofmeans ofmeasurements formilitary purposes
inarmed forces (licence issued bytheMinistry ofDefense oftheRussian Federation);
- development andproduction ofarms andmilitary hardware (licences issued bytheState
Committee onDefense Industries oftheRussian Federation);
- testing, manufacture, storage andpreparation forlaunching ofspace objects (licences issued
bytheRussian Space Agency).
(iv) Services Relating toInvestigation andSecurity
Thisactivity isregulated bytheLawoftheRussian Federation "OnPrivate Detective and
Security Activity" ofMarch 1992, bytheLawoftheRussian Federation "OnWeapons" andissubject
tocompulsorylicensing.InaccordancewiththeRegulationoftheGovernmentoftheRussianFederation
of17November 1994, No.1272 licences ontheconduct ofdetective andsecurity activity isgranted
bytheorgans oftheMinistry ofInternal Affairs oftheRussian Federation.WT/ACC/RUS/6
Page9
Servicesincidentaltothecreation,productionandoperationofcodingmeans,codinginformation,
providing services related tointerception ofinformation ingovernment premises canberendered only
afterreceiving licences oftheFederal Agency ofGovernment Communications andInformation. This
requirement iscontained intheFederal Law"OnFederal Organs ofGovernment Communication and
Information Network", theDecree ofthePresident oftheRussian Federation of3April 1995No.334
andRegulation oftheGovernment oftheRussian Federation of24December 1994 No.1418.
Inaddition, according totheRegulation oftheGovernment oftheRussian Federation of
15April 1995 No.333, theFederal Security Service requires licensing ofactivities ofanyenterprise
ororganization onservices using datacontaining statesecrets.
(v) Services Relating toHuman Resource Management
Inconformity with theRegulation oftheGovernment oftheRussian Federation of
24December 1994, No.1418 licences arerequired forthefollowing activities:
- rendering ofpaidservices intheemployment ofindividuals byprivate organizations (issuance
oflicences isexecuted bytheorgans oftheexecutive power ofthesubjects oftheRussian
Federation upon issuance ofacertificate bytheFederal Employment Service); and
- activity related toemployment ofRussian citizens abroad (licences aregranted bytheFederal
Migration Service ofRussia subject tothecertification oftheFederal Migration Service).
(vi) Services Relating toPhotography, Packaging, Printing andPublishing
InaccordancewithRegulationoftheGovernmentoftheRussianFederationof24December1994
No.1418, thefollowing activities require licensing:
- printing ofdriver licences (issuance oflicences isconducted bytheMinistry ofInternal Affairs
oftheRussian Federation);
- services relating tocartography (licences aregranted bytheFederal Service ofGeodesy and
Cartography oftheRussian Federation).
(b) Communication Services
Services relating tocommunications intheterritory oftheRussian Federation areregulated
bytheFederal LawonCommunications adopted bytheStateDuma on20January 1995. Theactivity
ofnatural andjuridical persons connected withthecommunications services isconducted onthebasis
oflicencesgrantedbytheMinistryofCommunicationsoftheRussianFederation.Controloverlicensing
ofactivity intheareaofcommunications isconducted byGossvyaznadzor oftheRussian Federation.
Jointventureswithforeignorganizationsorcitizensarepermittedinthedomesticorinternational
express maildelivery, aswellasforthedistribution ofadvertising material.
Inregard totelecommunications, jointventures maybeestablished toprovide thefollowing
services:
- alltypes ofcommunication activity onselected communication networks (e.g.onnetworks
nothaving access topublic switch network);
- services oflocaltelephone communications (rural, urban, regional);
- value added communications services.WT/ACC/RUS/6
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Requests forinterconnection offoreign suppliers ofservices tothedomestic basic
telecommunications network areconsidered oncase-by-case basis.
Qualificationrequirements,technicalstandardsandlicence/registrationrequirementsforrendering
communications services intheRussian Federation conform tothecorresponding provisions ofActs,
Conventions andAgreements oftheInternational Telecommunications Union (ITU), theWorld Postal
Union (WPU), European Conference ofPostal Administration (CEPT), oftheEuropean Institute of
Telecommunications Standards (ETCI).
(c) Audio-Visual Services
(i) Services inRadio Broadcasting andTelevision
Direct broadcasting, e.g.transfer ofbroadcasting signals isregulated bythe'Federal Lawon
Communications '.Theactivities ofbroadcasting companies, bothstateandcommercial, areregulated
bytheLawoftheRussian Federation onMass Media (No.2124-1 of27December 1991).
Licences forbroadcasting onRussian territory aregranted bytheFederal Service onTelevision
andRadio Broadcasting (FSTR) upon approval oftheMinistry ofCommunications onthebasis of
"Provision onLicensing Television andRadio Broadcasting" and approved bytheGovernment
Regulation "OnLicensing ofTelevision andRadio Broadcasting intheRussian Federation" No.1359-1
of27December 1994.
Thereareabout900commercialcompaniesoperatinginthisarea.Currently,Russianlegislation
doesnotimpose quantitative limitations onthebroadcast offoreign programmes, orontheparticipation
offoreign investors increation andfinancing ofbroadcasting companies.
(ii) Services Relating toProduction andDistribution ofCinema andVideo Films
TheCommittee oftheRussian Federation onCinematography isthestateregulatory organ
inthissector. Inaccordance withRegulation oftheGovernment oftheRussian Federation No.396
theregistration ofcinema andvideo films designed forpublic demonstrations atcinema andvideo
installations, incinema andvideo theatres, video saloons andother hallsisobligatory. Noscreen time
quotas arecurrently ineffect.
(d) Distribution Services
Inaccordance withRussian legislation, solution ofissues regarding activity inthesphere of
commerce andretail services istheresponsibility ofregional andlocalgovernments. Quality control
hasbeenassigned totheInspection oftheRussian Commerce Committee. Licensing isemployed solely
inrelation tocommodities subject toexcise duty.
Small andmedium business dominate inthissector. Asoftoday, 61percentoftrade
organizations and41percentofcatering (from thetotalquantity ofenterprises resting ontheirown
balance) aresmall andmedium enterprises (with thenumber ofworkers notexceeding 15people in
retail and30people inwholesale).
Radical changes haveoccurred inwholesale trade. Specialized wholesale trade societies have
beentransformed intoassociations, companies andfirms.WT/ACC/RUS/6
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(e) Education
According toRegulation oftheGovernment oftheRussian Federation of24December 1994
No.1418 licensing isimplemented ineducational areabythefollowing organs:
- intheareaofpre-school, primary, comprehensive, basic, andsecondary education, aswell
asofprimary vocational andsecondary pedagogical education -bytheorgans oftheexecutive
power ofthesubjects oftheRussian Federation;
- intheareaofsecondary, higher, postgraduate professional education -bytheStateCommittee
oftheRussian Federation onHigher Education;
- intheareaofhigher engineering andpedagogical education oftheMinistry ofEducation of
theRussian Federation.
Additional requirements toeducational services arecontained inGovernment Regulation of
theRussian Federation of24April 1995"OntheOrder ofDevelopment ofStateStandards ofSecondary
Professional Education intheRussian Federation".
Foreign firms engaged inthisservices sector andregistered asRussian juridical persons are
granted national treatment. Legal documents regulating theshare ofeducational services inRussia
contain noprovisions incompatible withthemost-favoured-nation treatment .
(e) Services Relating toEnvironment Protection
Licensing inthesphere ofenvironment protection intheRussian Federation isconducted in
accordance withtheRegulation oftheGovernment oftheRussian Federation of24December 1994
No.1418 'OnLicensing Specific Types ofActivity 'bytheMinistry ofNature ofRussia andbyterritorial
bodies oftheprotection ofnature. Certification intheareaofenvironment protection isimplemented
bytheMinistry ofNature incoordination withGosstandard.
According totheLawoftheRussian Federation "OnEnvironment Protection" anenvironmental
audit bythestateisaprerequisite toanyeconomic decision theimplementation ofwhich could be
detrimental totheenvironment.
(f) Financial Services
(i) insurance
According tothestatistical dataof1994, thetotalamount ofcollected insurance premiums
constituted 1.2percentofthegross national product. Asof1June1995, 2690insurance organizations
were included inastateregister, 54percentofthose hadbeenpresent inthemarket lessthanone
year. Thestateinsurance companies constitute 5percentofthetotalnumber ofcompanies; 56percent
oftheoverall insurance premiums collected in1994 pertain to50major insurance companies. As
of1September 1995, 71jointventure insurance companies were registered inRussia.
Thelegislative basisoftheactivities ofinsurance companies andconducting insurance includes
theCivil Code oftheRussian Federation, theLawoftheRussian Federation "OnInsurance" of
27November 1992(thenewedition ofthelawwasadopted bytheStateDuma oftheFederal Assembly
on14July1995), theLawoftheRussian Federation "OnMedical Insurance oftheCitizens inthe
Russian Federation", thelegislative actsofRosstrakhnadzor.
Regulation oftheinsurance market takesplaceonthebasisofgeneral requirements onlicensing
andregistration ofinsurers, insurance brokers, insurance auditors andassociations ofinsurers, and
prudential control including auditing andreporting. Coordination oninsurance issues iscarried outWT/ACC/RUS/6
Page12
bythefederal organ oftheexecutive power -theFederal Service ofRussia onInsurance Supervision
(Rosstrakhnadzor).
TheLawoftheRussian Federation oninsurance recognizes insurers asjuridical persons in
theform ofstockholding companies orstateunitary enterprises (insurance organizations), thathave
received licences tocarry outinsurance activity inRussian Federation asprovided forbyLawand
bymutualinsuranceassociations.Insurersinvolvedinlifeinsuranceareprohibitedfromofferingnon-life
insurance. Licensing isrequired foractivities ofinsurance companies thatdealexclusively with
reinsurance, aswellasinsurance brokerage.
The"Russian StateCompany", asprovided inthelegislation oninsurance, hasexclusive rights
toofferanumber ofobligatory insurance authorized bythedecisions oftheGovernment oftheRussian
Federation. Russian legislation hasestablished obligatory medical insurance.
Thelawpermits foreign juridical persons andforeign citizens toparticipate intheestablishment
ofinsurance organizations intheRussian Federation withanequity participation notexceeding
49percent. Thelawdoes notallow brokerage activity aimed attheconclusion intheRussian
Federation ofinsurance contracts onbehalf offoreign insurers, unless otherwise stipulated inthe
international treaties oftheRussian Federation orfederal laws.
Thelegislation oftheRussian Federation doesnotpermit saleofinsurance services ona
crossborder trade. Theforeign insurer isrequired toestablish abranch intheRussian Federation.
(ii) Banking andother financial services (excluding insurance)
According toArticle 2oftheLaw"OnBanks andBanking Activity", thebanking system
oftheRussian Federation consists oftwolevels, thefirstofwhich isoccupied bytheCentral Bank
oftheRussian Federation, thesecond onebycommercial banks andnon-bank credit operations that
conduct thebanking activity onthebasis oflicences issued bytheCentral Bank ofRussia. Banking
operations inforeign currency canbeconducted onlybythose credit organizations which havecurrency
licences issued bytheCentral Bank. Atpresent, thefollowing types ofcurrency licences arevalid:
(1) internal currency licence authorizing conduct ofalimited number ofbanking operations in
foreigncurrency(clients'currencyaccounts,internationaloperations,currencyserviceofcitizens
etc.).
(2) expanded currency licence envisaging (beside afore-mentioned operations) thepossibility of
establishing correspondent relations withforeign banks.
(3) general licence, authorizing conduct ofafullscope ofbanking operations inrubles andforeign
currency stipulated bytheLawoftheRussian Federation 'OnBanks andBanking Activity
inRSFSR '.
Presently, 2570banks conduct banking activity ontheterritory ofRussia. Ofthem268banks
possess theGeneral Licence, 262operate withexpanded currency licence and527banks withinternal
currency licence. Thepossibility ofparticipation offoreign banking capital inRussia isprovided for
inArticle 1oftheLaw"OnBanks andBanking Activity". Foreign banks canexecute banking activity
intheRussian Federation bywayofcreating jointventure banks, aswellasbyopening affiliated
branches. TheCentral Bank ofRussia mayimpose additional capital requirements onjointventure
banks, withthepurpose ofensuring equal opportunities forcompetition forallbanks. TheCentral
BankofRussia obliges foreign participants ofjointventure orforeign banks tocontribute tothecharter
capital anamount nolessthanUS$2 million, inaccordance withthecurrent rateatthetimeof
investment.WT/ACC/RUS/6
Page13
Toopenabranch ofajointorforeign bankintheRussian Federation, aseparate licence is
required fromtheCentral BankofRussia. Branches offullyforeign owned banks withastrong financial
position andimmaculate business reputation arepermitted tooperate. Preference isgranted tobanks
whose short-term obligations havetheIBCA classification, Moody 'sorStandard andPoors rating no
lower thanAA,prime -1.Anon-resident bank'saffiliated branch tobeopened onRussian territory
should possess adequate capital, which isdetermined bythenon-resident bankwiththeagreement of
theCentral Bank oftheRussian Federation. Such capital should benolessthanUS$5 million, in
accordance withthecurrent ratessetbytheCentral Bank ofRussia.
On29March 1993, theBoard ofDirectors oftheBank ofRussia authorized a12percent
limitoftheshare forforeign capital inthebanking system oftheRussian Federation. Thelimitrelates
tothose banks whose charter capital isformed withmore than50percentforeign equity participation.
Atthepresent time, 180banks withsome degree offoreign ownership, areregistered andconduct
banking activity. Ofthisnumber, 16banks aremorethan50percentowned bynon-residents, including
10totally foreign owned banks.
TheDecree ofthePresident No.1924 of17November 1993introduced temporary limitations
until1January 1996onforeign banks andtheiraffiliates, aswellasonjointventure banks withnon-
resident capital exceeding 50percent,andwhich didnotstartrendering theirservices totheresidents
oftheRussian Federation before 15November 1993, aswellasonthose whoreceived licences after
theaforementioned date. TheDecree ofthePresident oftheRussian Federation No.1184 of
10June1994 authorized withdrawal ofthose limitations forbanks whose home countries hadentered
intoagreements forthepromotion andprotection ofinvestments. Limitations werealsoremoved for
those banks andaffiliates which hadreceived licences fromtheBank ofRussia before thepublication
ofthisDecree. President 'sDecree No.419 of27April 1995removed those limitations oncertain fully
foreign owned commercial banks which hadbeenregistered before 5November 1993.
Presently foreign andjointventure banks areissued licences according totheprinciple of
reciprocity withrespect totheirhome countries 'treatment ofRussian banks subsidiary andjoint-venture
branches, aswellasaffiliates andrepresentative offices.
1. Securities
Presently theFederal Law"OnStock Market intheRussian Federation" isunder consideration
intheFederal Assembly. Pending itsadoption, thesecurities market isbeing regulated bytheLaws
ofthePresident oftheRussian Federation, bytheDecrees oftheGovernment oftheRussian Federation,
byregulatory actsoftheMinistry ofFinance oftheRussian Federation andtheFederal Commission
onSecurities andStock Market oftheGovernment oftheRussian Federation.
TheDecree ofthePresident oftheRussian Federation of4November 1994 No.2063 "On
Measures onState Regulation ofStock Exchange intheRussian Federation", provides thatbusiness
activity instock exchange, including underwriting, placement, purchase andsaleofsecurities, isbeing
conducted onthebasis oflicences issued inaccordance withtherelevant legislation oftheRussian
Federation. Limitations ofactivities ofcitizens andjuridical persons which actasinvestors insecurities
orfinancial market, inclusive ofthose dealing withshares andother securities, canbeestablished by
federal lawsanddecrees ofthePresident oftheRussian Federation. ThisDecree alsostipulates that
thesecurities market conducts thefollowing types ofentrepreneurial activity:
- brokerage -conclusion ofcivilandlegaltransactions withsecurities onthebasisofcommission
agreements and/or guarantees;WT/ACC/RUS/6
Page14
- dealing -conclusion ofpurchase/sale transactions initsownname orattheexpense ofpublic
announcement ofprices forthepurchase andsaleofthose securities according toannounced
prices;
- deposit -activity onstoring securities and\or accounting oftheirrights forsecurities;
- shareholders 'register management -activity conducted bytheholder ofshares register inthe
order established bylegislation oftheRussian Federation;
- clearing transactions onfunds -activity ondetermining mutual commitments and/or thetransfer
offunds related tosecurities transactions;
- organization ofsecurities trading -rendering ofservices promoting securities transactions
between professional participants inthesecurities market, including stock exchange activity.
Regulation oftheGovernment ofRSFSR of28December 1991No.78 approved theProvision
ontheissueandtransfer ofsecurities andstockexchanges inRSFSR. Inaccordance withthisProvision,
theMinistry ofFinance oftheRussian Federation approved:
- licensing forinthesecurities exchange asinvestment funds andonlicensing activity ofmanagers
ofinvestment funds (Instruction oftheMinistry ofFinance oftheRussian Federation of
28December 1992 No.1212);
- licensinginvestmentinstitutions(InstructionoftheMinistryofFinanceoftheRussianFederation
of12September 1992 No.91);
- licensing stock exchange activity inregard tosecurities transactions (Instruction oftheMinistry
ofFinance oftheRussian Federation of13April 1992 No.20).
None oftheaforementioned provisions envisage anylimitation ontheparticipation ofnon-
residents inthesecurities markets oftheRussian Federation.
Thefundamental legaldocuments regulating financial leasing services inRussia aretheDecree
ofthePresidentoftheRussianFederationof17September1994No.1929"OnDevelopmentofFinancial
Leasing" andtheRegulation oftheGovernment oftheRussian Federation of29June1995 No.655
"OnLeasing Development InInvestment Activity". TheGovernment oftheRussian Federation adopted
adecision onRussia joining the1988 Ottawa Conference onfinancial leasing.
(g) Services inHealth Care andSocial Spheres
Inaccordance withtheOrder oftheMinistry ofHealth CareandMedical Industry oftheRussian
Federation No.146 of29May1995 "Ontheorder ofaccess tomedical andpharmaceutical activity
intheRussian Federation ofpersons whoreceived medical andpharmaceutical training inforeign
states", foreigners mayprovide medical andpharmaceutical services intheRussian Federation onthe
condition thatthefederal government organs oneducation shallestablish, jointly withtheMinistry
ofHealth Care andMedical Industry, therecognition ofqualifications. Theprovision ofmedical
andpharmaceutical services require thatlicences fromtheMinistry ofHealth CareandMedical Industry
oftheRussian Federation.
(h) Tourism AndTravel-Related Services
InconformitywithRegulationoftheGovernmentoftheRussianFederationof24December1994
No.1418,renderingofservicesintheareaofinternationaltouristactivityissubjecttoobligatorylicensing
bytheStateCommittee oftheRussian Federation onPhysical Culture andTourism. Presently, 4,416WT/ACC/RUS/6
Page15
licences havebeenissued inRussia totourist firms, ofwhich 186licences havebeengranted tojoint
ventures withforeign capital, including companies with100percentforeign capital.
Foreign firms involved inthisservices sector andregistered asRussian legalpersons receive
national treatment. Regulatory documents ontourist services inRussia donotcontain provisions
incompatible withthemost-favoured treatment.
(i) Transportation Services
Thestateregulation ofair,river, maritime androadtransport istheMinistry ofTransportation
oftheRussian Federation through itsTransport Departments, while railtransportation isregulated
bytheMinistry ofRailTransport. Transportation enterprises aresubject tolicensing bytheMinistry
ofTransport oftheRussian Federation according toRegulation oftheGovernment oftheRussian
Federation.
Inregard toairtransport, Government Regulation (GR) oftheRussian Federation No.850
of23August 1993, stipulates licensing onthefollowing commercial services: (a)transfer ofpassengers
andcargoes; (b)maintenance ofaircraft, andservicing ofpassengers andcargoes inairports;
(c)auxiliary commercial services. Inaccordance withairtraffic agreements, foreign airline companies
andenterprises organizing flights totheRussian Federation, havetherighttoopenrepresentative offices
fortheconduct ofcommercial andadvertising activity. Airline companies seeking toopensuchoffices
should apply totheDepartment ofAirTransportation, which isguided bytheRegulation onthe
Establishment andOperation Representatives ofForeign Firms, Banks, Organizations (approved by
Regulation oftheCouncil ofMinisters of30November 1989), inissuing licences.
According toGRNo.840 of23August 1993, licences arerequired formaritime andinland
waterway transportation andavariety ofancillary services. Preferential treatment ofvessel taxation
isapplied toforeign vessels sailing under theflagofstates withwhom theRussian Federation has
maritime trade agreements. Inaccordance withtheCharter ofInland Waterway Transport (Article 5)
foreign vessels cannot sailoninland waterways ofRussia.
Onroadtransport-accordingtoGRNo.118of26February1992,andNo.372of23April1994,
thefollowing services should belicensed: (a)urban, suburban, interurban interrepublican and
international transportation ofcargoes andpassengers; (b)forwarding services; (c)maintenance and
technical services. Alltypes oflicences aregranted foraspecified period (3months, 1yearor5
years)byregionaldepartmentsoftheRussiantransportationinspectionserviceanditsaffiliatedbranches.
However, licences forinternational carriage andauxiliary services areissued bytheMinistry of
Transportation oftheRussian Federation ororgans authorized bythisMinistry.
Themajority ofIntergovernmental Agreements oninternational roadtransport subscribed to
bytheRussian Federation provide fortheissuance oflicences forfreight andpassenger traffic between
Russia andthecountry oforigin ordestination andthose oftransit onacase-by-case basis. Thenumber
ofsuchlicences isspecified onanannual basis.
According toGRNo.536 of25May1994, -alistofservices relating toroad design,
construction, reconstruction, andmaintenance ofleroads androadinstallations onthem; -construction,
reconstruction, andmaintenance isdrawn upbytheMinistry ofTransport subject toapproval ofthe
State Committee oftheRussian Federation onArchitecture andConstruction.
RailTransport isregulated primarily bytheFederal Law"OnFederal RailTransport" of
20July1995 No.153-F3, andbythe1964 Charter ofRailroads oftheUSSR. Tariffs fordomestic
cargo andpassenger transportation areregulated inaccordance withRegulation oftheGovernmentWT/ACC/RUS/6
Page16
oftheRussian Federation of7March 1995No.239 "OnMeasures Related toStateRegulation ofPrices
(Tariffs)" inthefollowing manner:
- theGovernment oftheRussian Federation regulates tariffs onthetransport offreight and
passengers, baggage, andmail(apart from suburban transportation);
- insuburbantransportationtariffsareregulatedbyrailroadssubjecttoapprovalfromtheMinistry
ofRailTransportationoftheRussianFederation.Regionalandlocalgovernmentsareauthorized
tointroduce statetariff regulation onpassenger andbaggage carriage bysuburban railroad
transportation.
Most-Favoured-Nation Treatment Regime (MFN)
TheRussian Federation hascurrently adopted international commitments initsrelationships
withthemajority ofCIScountries practically foralltypes oftransport (excluding airtransportation)
onunhindered passage ofcargoes onandthrough theirterritories.
Institutional Base ForTrade andEconomic Relations With Third Countries
Bilateral agreements oragreements withseveral countries related totrade inservices, include
inparticular, relations intheareaofinternational carriages areregulated alsobyinternational
agreements, 261suchagreements were ineffect asof1January 1995.
Inautomobile transport -41,specifically withCISandBaltic countries -12.
Inairtransport 129, specifically withCISandBaltic countries -8.
Inmarine transport -84
Inriver transport -3
Inrailtransport -4
Asnoted inthepreceding paragraphs, specific agreements contain limitations onmost-favoured-
nation treatment regime intrade inservices.
Information withrespect toeconomic integration, customs unions, freetradeareas andlabour
markets willbeprovided inlightofprogress inintegration between theRussian Federation andother
countries, inparticular themembers oftheCIS. TheRussian Federation participates inpractically
allmultilateral economic organizations ofaglobal character.WT/ACC/RUS/6
Page17
Annex 1
Table 1
Share inGDP oftheServices Sector
_________________________________________________________________________________
in%toGNP
1993 1994
_________________________________________________________________________________
Total inServices, 42.0 53.5
Including:
Market services 31.0 41.0
Transport 6.8 10.5
Communications 0.7 1.1
Trade andpublic catering 12.2 12.6
Material andTechnical Supplies 1.4 1.3
Procurements 0.3 0.2
Information andelectronic service 0.1 0.1
Operations withrealestate 0.2 0.2
General Commercial Activity on
theprovision ofMarket Functioning 1.2 1.2
Geology andsurvey, geodesic and
hydrometric services 0.2 0.2
Housing 0.6 0.8
Non-production types ofpublic
services 0.1 0.3
Finances, credit, insurance 5.5 10.0
Science andscientific service 0.4 0.3
Health care, physical culture and
social security 0.1 0.3
Education, culture andart 0.1 0.2
Management 0.5 0.9
Other services 11.0 12.5
Road services 0.1 0.2
Organizations serving agriculture 0.1 0.1
Housing 1.8 1.9
Communal services 0.5 0.5
Science andscientific catering 0.6 0.6
Health care, physical culture and
social security 2.0 2.1
Education, culture andart 3.2 3.6
Defense 1.3 2.0
Management 1.2 1.3
Public associations 0.2 0.2WT/ACC/RUS/6
Page18
Table 2
Share ofEmployed intheServices Sector oftheRussian Federation
in1994 andtheFirstHalfof1995 (inpercent)
_________________________________________________________________________________
1994 1-sthalf1995
_________________________________________________________________________________
Total
Employed intheeconomy ofthe
Russian Federation 100.0 100.0
Incl.intheservices sector 46.3 48.1
Incl.inindustries -trade, public catering,
material andtechnological supply,
procurements 9.5 9.7
Transport andCommunications 7.8 7.8
Information andelectronic services 0.1 0.1
Housing andCommunal services and
non-production types ofpublic services 4.4 4.8
Health care, physical culture and
social security 6.4 6.7
Education, culture andart 10.8 11.3
science andscientific services 2.7 2.5
crediting andstateinsurance 1.1 1.1WT/ACC/RUS/6
Page19
Table 3
Structure ofMain Indicators ofForeign Trade inServices
oftheRussian Federation withForeign States for1993-1994*
Export ofServices Import ofServices
1993 1994 1993 1994
$mil. %
total$mil. %
total$mil. %
total$mil. %total
*CIScountries notincluded
Thevolume of
services -total6,437.0 100.0 6,906.0 100.0 9,155.0 100.0 13,769.1 100.0
Inclusive
Transport services 2,724.0 42.3 3,074 44.5 2,647.0 28.9 2,413.0 17.5
Tourism 2,545.0 39.5 2,053 29.7 3,962.0 43.3 6,825 49.6
Construction
services243.0 3.8 131.0 1.9 1,047.0 11.4 1,860 13.5
Postal and
Communication
services2.6 0.0 32.0 0.5 0.2 0.0 28.3 0.2
Commercial
services, services in
agriculture, mining
andmanufacturing
industries437.6 6.8 327.3 4.7 2.6 0.0 2.9 0.0
Renting equipment,
transport services18.9 0.3 17.3 0.3 - - 0.4 0.0
Investigation and
development10.0 0.2 22.6 0.3 2.9 0.0 0.8 0.0
Law, accounting,
revision, taxation,
marketing237.4 3.7 297.9 4.3 32.3 0.4 107.4 0.8
Poligraphy 79.7 1.2 46.6 0.7 50.9 0.6 84.9 0.6
Commercial
services not
included inother
categories22.8 0.4 33.5 0.5 52.7 0.6 24.6 0.2
Education 22.3 0.3 17.5 0.3 25.6 0.3 9 0.1
Non-financial non-
material assets0.8 0.0 3.6 0.05 39.6 0.4 23.8 0.2
Financial mediating
andsupplementary
services77.2 1.2 81.2 1.2 77.1 0.8 86.8 0.6
Other services 15.6 0.2 768.5 11.1 1,215.1 13.3 2,302.2 16.7