Grounds (criteria) applied by authorised bodies for granting exceptions to payment for natural resource use must be stipulated by federal law.

16.06.2009

LEGAL UPDATE No. 45.

Goltsblat BLP advises of the publication of Resolution of the Constitutional Court of the Russian Federation of 14 May 2009 No. 8-P “On checking the constitutionality of the provision in subclause “b”, clause 4 of Resolution of the Government of the Russian Federation “On approval of the Procedure for determining payment and its limits for pollution of the environment, placement of waste, and other forms of harmful impact” in connection with a request from the Supreme Court of the Republic of Tatarstan” (hereinafter the Resolution), recognising the given provision as being in contravention of the Constitution of the Russian Federation.

The considered provision establishes that executive authorities of constituent entities of the Russian Federation may, given the requisite approvals, reduce payments for environmental pollution or exempt certain organisations in the social and cultural sphere from these, as well as organisations supported by the federal budget and budgets of constituent entities of the Russian Federation.

In this connection, the Resolution notes that only the federal legislation or specific instructions thereby can regulate exemption of organisations from payment for negative environmental impact. Accordingly, the grounds (criteria) for granting exceptions to payment for natural resource use may be envisaged only by federal law and must meet the requirements of legal determinacy, economic justification and observance of the balance of public and private interests and must not, in any event, raise doubts that the relevant natural resource use benefits are fair and commensurable. In turn, it is the specific body (in this case, the Government of the Russian Federation) or authority level mentioned in the federal law that is to exercise the powers granted to it and only if so stipulated specifically by federal law may it assign these powers or part of them to other public authorities (such as constituent entity executive authorities).

Bearing in mind that this provision’s loss of its legal effect once the Resolution is promulgated will entail substantial changes in the budgetary liabilities of the relevant organisations and will affect the budget system’s revenues and outlays, and also in order that the legislators might have an opportunity to introduce the requisite changes into the regulations and interested entities to adapt to the new conditions, the Constitutional Court of the Russian Federation has deferred enforcement of its decision and has established that the provision recognised as unconstitutional will lose its effect from 1 January 2010.

The possibility of taking advantage of environmental pollution payment benefits granted by a constituent entity executive authority as prescribed by the given provision will remain in place until 31 December 2009.

For additional information, please contact:

Vitaly Mozharowski, Partner,
Commercial/Industrial Real Estate and Construction,
Goltsblat BLP;
Tel: +7 (495) 287 44 44,
Email: info@gblplaw.com

Tatiana Vasilieva, Head of Tax Group,
Goltsblat BLP;
Tel: +7 (495) 287 44 44,
Email: info@gblplaw.com

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