KALININGRAD - THE FREE ECONOMIC ZONE I N RUSSIAN FEDERATION
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Legislation on the Special Economic Zone

In order to manage the difficult situation, an idea of the Special Economic Zone was born. Shortly after the Agreement between the Russian government and Kaliningrad Region was concluded, on 22 January 1996 the Federal Law on the Special Economic Zone in Kaliningrad Region was adopted by the State Duma (the Russian Federation parliament). The law provides the legal basis for the government protection of investment and entrepreneurial activity. In addition, there is a regulation of the State Customs Committee of 10 July 1997 (¹ 268-ð/01-16/44), in which it is said that goods for internal use in the Kaliningrad Region and goods produced in the Region and, after that, imported into another part of the customs territory of the Russian Federation or to the territory of the CIS customs union or abroad are freed from customs duties and other payments. The goods mentioned are not subject to measures of the Russian Federation economic policy (measures for the non-tariff regulation of foreign trade activity). Only a customs duty of 0.15% is levied on the goods value.

A ware is regarded as having been produced in the Special Economic Zone if the amount of the added value during its processing is not less than 30 per cent, but for goods related to electronics and complex household technology – not less than 15 per cent, and that the processing causes a change in the code of the ware in the customs classification. The origin of a ware is corroborated by a certificate of origin issued by the Chamber of Commerce and Industry of Kaliningrad (TPP).

According to the law, neither foreign legal nor physical persons may buy the land but it can be leased. According to the information from the State Property Management Committee, which plays an important role during the sales of land or real property, under special conditions, it is allowed to buy a lot related to some production facilities.

Before the above-mentioned Agreement and the Law of the State Duma came into force, the law On Terms of Stimulating Investment in the Kaliningrad Region of 27 April 1995 was adopted.

Recently, legislation on the Special Economic Zone was supplemented by more documents. The legal basis remains the same but it is extended by these. The Federal Target Programme for the Special Economic Zone Development in Kaliningrad Region in 1998-2005 signed on 29 September 1997 by Mr Chernomyrdin is a sign of the special attention paid to the Region’s hard situation and should include grants for the development of the Special Economic Zone.

Under the strong pressure of the governor, the Regional Law on Local Free Economic Zones in Kaliningrad Region was adopted by the Kaliningrad Regional Duma, by which, in fact, the above-mentioned law on stimulating investment was replaced. Both legal and physical persons have the right to apply for establishment of a Local Free Economic Zone to the special commission whose members are appointed by the governor. The permission is given on a competitive basis, and it implies granting concessions in order to promote investment. Until now, there have been no practical examples available.

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