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Investor Presentaiton

32 Leonid B. Vardomskiy the legal status of individual preachers or missionaries, the order of their accred- itation and the basis of refusal of accreditation, the basis for banning foreign pros- elytizing religious organizations, religious sects, individual preachers and missionaries, and also the penalties for violation of this law. The legislation was enacted before the adoption of the federal law On the Freedom of Consciousness and Religious Groups. The absence of federal legislation led to the adoption of the law On the Order of Sojourns in the Territory of the Ryazan Oblast of Persons who are not Citizens of the Russian Federation in November 1996. This law regulated the reg- istration of foreign citizens, the registration oversight, and the duration of stay in the territory of Ryazan Oblast, as well as penalties for violations. Articles referring to international cooperation can also be found in laws of Ryazan Oblast, which give equal rights to both national and foreign economic actors. In some cases, they even give priority to international legislation over Russian and local laws. For example, Article 60 of the law of Ryazan Oblast On Protection of the Environment in the Territory of Ryazan Oblast of 25 December 1998 established the following order of implementation of the norms and rules of international treaties in the sphere of environmental protection: "If an international treaty signed by the Russ- ian Federation establishes different norms and rules for the protection of the envi- ronment than those specified in the legislation of the Russian Federation and Ryazan Oblast, the norms and rules of the international treaty are to be used." The law of On Tourist Activities on the Territory of Ryazan Oblast of 17 Sep- tember 1999, specifically analyses such issues as "the development of practical measures for attracting national and foreign investment in the tourist industry;" and conducting tourist activities on the basis of the "financial means of the investors, both national and foreign." Article 5 of the above-mentioned treaty is fully devoted to cooperation in the sphere of tourism, and it establishes the legal basis for the tourism industry in Ryazan Oblast. For the purposes of attracting foreign investment, the Duma adopted a res- olution On Granting Tax Privileges to Enterprises with Foreign Investment Reg- istered in the Territory of the Ryazan Oblast. The resolution was in accordance with the Russian national legislation, and stated that "enterprises with foreign investment engaged in industrial activity, including those in the service sphere, that are registered in the territory of the Ryazan Oblast, under the condition that the appropriated portion of foreign investment in the established fund is no less than 30%, and the equivalent sum is no less than US$30'000, and if they are reg- istered after 1 January 1994, pay profit taxes, property taxes, taxes on ownership of means of transportation, and a fee for the needs of educational institutions, in particular, to the oblast budget in the following order: In the first two years of functioning they shall not by subject to the above taxes and fees under the condition that the profit from industrial activity exceeds 70% of the total sum of profits from realization of production (good and services); Foreign Economic Relations of Ryazan Oblast 33 in their third and fourth year of operation they shall pay accordingly 25% and 50% of the main rate of the above-mentioned taxes if profits from industrial activ- ity make up above 90% of the total sum of profits from realization of their prod- ucts (goods and services). In the case of cessation of functioning of the enterprise within the 5-year term, the sum of taxes to the oblast budget must be paid in full, which was specified in paragraph 2 of the above-mentioned resolution." The principles of this resolution were fully integrated in the laws of the Ryazan Oblast on tax privileges in 1995 and 1996. However, after the inaugura- tion of V. M. Lyubimov and his team as Head of Administration, the resolution lost its force. Since 1997, the activity of foreign investors in the oblast has been decreasing. In June 1998, the law On Investment Activity in the Territory of Ryazan Oblast was adopted, which stated that "the present law is directed at the devel- opment of investment activity in the territory of Ryazan Oblast, and on creating a regime of most favorable status for participants of investment activity, regardless of the form of property." In accordance with this law, all kinds of investment, investment activities, and financial sources of investment activity must agree with the federal legislation. Support for investment activity is administered by the organs of government of the Ryazan Oblast and the organs of local self-govern- ment by granting credits on favorable conditions, purchasing part of the stock as oblast and/or municipal property, granting tax benefits to the participants of investment activity, participation of the executive organs of the oblast govern- ment and/or (or) local government in the expertise and in full or partial financ- ing of investment projects, and giving guarantees to the participants of investment activities. The regional state bodies hold competitions for the purpose of attracting investors Selection of investors should be made on the basis of the statute On the Competitive Selection of Investors, which was approved by the Head of the Administration of the Oblast. This law does not guarantee any special privileges to foreign investors; how- ever, it does not preclude granting such privileges. Therefore, Russian and for- eign investors are treated as equal subjects of investment activity in the territory of Ryazan Oblast. In order to attract foreign investment to the Ryazan Oblast, the Committee on Foreign Economic Relations of the Oblast Administration prepared and intro- duced a draft law On Solicitation of Foreign Investment to Ryazan Oblast for con- sideration by the Ryazan Oblast Duma in March 1991. After the Duma Committee on Budget and Taxes had studied it, the draft law was rejected by the majority of the deputies and sent back for additional consideration. So far the work has not been completed. Overall, the legislation of the Ryazan Oblast regulates only individual issues of international contacts. There are no official programs for developing foreign
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