FINANCIAL SERVICES
ANNEX 7
FINANCIAL SERVICES
A. In respect of banking services referred to in Annex 6, Part B, the most-favoured-nation treatment granted pursuant to Article 28 (1), with regard to establishment by means of the setting up of a subsidiary only (excluding therefore establishment by means of the setting up of a branch), and the national treatment granted pursuant to Article 28 (3), by Russia means treatment no less favourable than the treatment granted by Russia to its own companies with the following exceptions:
1. Russia reserves the right:
(a) to continue to apply to Russian subsidiaries and branches of Community companies the ceiling limiting the overall share of foreign capital in the Russian banking system which is in operation on the date of signature of the Agreement;
(b) to apply to Russian subsidiaries of Community companies a minimum capital requirement higher than that applied to its own companies provided that this minimum capital requirement is not raised as compared with the one in force on the date of signature of the Agreement before national treatment is applied in respect of the minimum capital requirement;
(c) to restrict the number of branches of Russian subsidiaries of Community companies;
(d) to set a minimum level not higher than ECU 55 000 for balances on accounts of each physical person with Russian subsidiaries of Community companies;
(e) to prohibit Russian subsidiaries of Community companies from carrying out transactions with shares and instruments convertible into shares of Russian joint stock companies;
(f) to prohibit Russian subsidiaries of Community companies from carrying out transactions with Russian residents.
2. The exceptions in paragraph 1 may only apply under the following conditions:
(i) provided that they are applied to subsidiaries of companies of every country; and
(ii) for the exceptions mentioned in paragraph 1, subparagraphs (c), (d), and (e):
(a) until the expiry of five years from signature of the Agreement at the latest for the exceptions mentioned in subparagraphs (c) and (d) and three years for the exception mentioned in subparagraph (e); and
(b) where the proportion of the share capital of the Russian subsidiary of the Community company held by Russian nationals or companies does not exceed fifty percent (50%); and
(c) to Russian subsidiaries of Community companies established after the entry into force of these exceptions;
(iii) for the exception mentioned in paragraph 1, subparagraph (f), until 1 January 1996 and only to Russian subsidiaries of Community companies established after 15 November 1993 or which have not commenced their operations with Russian residents before 15 November 1993.
3. (a) After the expiry of five years from the date of signature of the Agreement, Russia will consider the possibility of:
(i) increasing the ceiling limiting the overall share of foreign capital in the Russian banking system which is in operation on the date of the signature of this Agreement, mentioned in subparagraph (a) of paragraph 1, taking into consideration all the relevant monetary, fiscal, financial and balance of payments considerations and the state of the banking system of Russia;
(ii) reducing the minimum capital requirement, mentioned in subparagraph (b) of paragraph 1, taking into consideration all the relevant monetary, fiscal, financial and balance of payments considerations and the state of the banking system of Russia.
(b) After the expiry of three years from the signature of this Agreement, Russia will consider the softening of restrictions mentioned in subparagraphs (c) and (d) of paragraph 1, taking into consideration all the relevant monetary, fiscal, financial and balance of payments considerations and the state of the banking system of Russia.
B. In respect of insurance services referred to in Annex 6, Part A, paragraphs 1 and 2 the most-favoured-nation treatment granted pursuant to Article 28 (1) with regard to establishment by means of the setting up of a subsidiary only authorized for the insurance operations is set out in the legislation and regulations applicable in Russia on the day of establishment taking into account the following conditions:
1. upon the expiry of five years from signature of the Agreement at the latest, Russia shall abolish the maximum foreign shareholding limit of 49 % in company capital;
2. during the transitional period of five years the abolition of the maximum foreign shareholding limit does not prevent Russia from introducing measures for granting licences to Community companies in some classes of insurance. These measures could be taken only in the field of compulsory insurance schemes in the social security, or for public procurement, or for the reasons described in Article 29 (2), and shall not nullify or substantially impair the effects of the abolition of the maximum foreign shareholding limit of 49%.