Not much has been said about the subjects of foreign economic activity. How to understand who it is and what it means? First you need to understand what foreign economic activity is. So, we begin to build a logical chain with a definition.
The concept
To talk about the subjects of foreign economic activity, you need to understand what constitutes the activity itself. What is it? This is the name of the state’s activities to develop cooperation with other countries in such areas as tourism, trade, technology, economics and culture.
The legal basis is international treaties, which may be multilateral. The latter establish the main directions and principles of cooperation between countries in various fields. A striking example is the Agreement on Cooperation in the Foreign Economic Activity of the CIS Member Countries, which was adopted back in 1992.
Agreements can be bilateral, they are designed to regulate relations between the two parties on a specific issue. Such agreements mean a lot, because they establish the obligations and rights of the parties, spell out the problems that will be regulated, and aspects of cooperation.
Bilateral agreements establish a preferential treatment for persons engaged in foreign trade. That is, legal entities and individuals are no less favorable rights than persons of other countries. For example, in the CIS countries there is a free trade regime, that is, there are no customs duties, duties and taxes on those goods that are produced on the territory of states between the countries participating in the agreement.
In addition, foreign economic activity is also called entrepreneurial work, which is aimed at moving goods or finances across the border of our country. This also includes the provision of services or the performance of any work.
In foreign economic activity, both objects and subjects are involved. Let's talk in more detail.
An object
Before defining the subject of foreign economic activity, it is necessary to understand the object. So, an object is understood as an import-export relationship between host entities. In addition, this also includes relations that are related to the performance of work or the provision of services in the territory of another country.
Export-import relations arise if products or goods are delivered abroad of Russia or vice versa. But that is not all. Relations can also arise due to the movement of capital when conducting accounts or investing in another country.
In addition to the subject of foreign economic activity and the object, they also single out the subject. Such may be the construction of facilities, the supply of goods, the transport of foreign trade goods, payment for services, goods or investing in the economy of another country.
Subject
The subjects of foreign economic activity are individuals with the status of an entrepreneur or legal entities that conduct entrepreneurial activity. Of the legal entities, entities will be considered Russian enterprises owned by individuals and legal entities, enterprises of foreign investors, enterprises that were created by local governments, state enterprises.
According to the regulations, the foreign economic activity of the constituent entities of the Russian Federation, foreign enterprises, state and others is permitted in the general manner. But for certain types of activities a special order was established. This happens because the country attaches particular importance to certain types of activities. For example, to protect national interests, a special order is established for strategically important commodities.
To obtain the right to export, it is necessary to go through a variety of procedures for enterprises and organizations. The procedure for such foreign economic activity of economic entities is enshrined in the Regulation “On the Procedure for the Registration of Organizations and Enterprises Eligible to Export Strategically Important Raw Materials”. The document was approved back in 1993 and is still valid.
Foreign economic activity of the constituent entities of the Russian Federation is possible only if the business entity acquires special legal status. To purchase it you will need documents.
Necessary documents and reasons for refusal
So, an organization or enterprise as a subject of foreign economic activity is obliged to provide the following papers to the MVES of our country:
- Organization finance report for the previous year.
- A certificate from the applicant, in which the companies with the participation of accounts or funds in foreign banks are indicated.
- Bank statement in which the currency and ruble account is indicated. Letters of recommendation should be attached to it.
The request for registration may be canceled, as well as for re-registration for the following reasons:
- There were violations of the legislation of our country in the non-economic sphere.
- The laws of another country were violated, resulting in political and economic damage to the Russian Federation.
- The applicant was spotted in dumping (understating) prices outside our country.
- The applicant has not fulfilled obligations in the past to supply strategically important commodities.
- The applicant has been spotted in unfair competition or restrictive business practices.
- The supply obligations for state needs were not fulfilled. In order for this item to become a basis for refusal, you must have confirming contracts in hand.
In the case of registration, the enterprise as a subject of foreign economic activity receives a Registration Certificate. The latter is valid for a year.
In addition to the certificate, enterprises are also included in the Register of enterprises that export. It is managed by the Ministry of Foreign Economic Relations. Upon receipt of the certificate, the organization or enterprise must sign the “Obligation of the Exporter of Strategic Commodities”. According to this document, the entity is obliged to provide data on foreign currency earnings from these goods to the Ministry of Foreign Economic Relations.
Who does not need registration
Not all entities must register as an exporter. For example, the export of strategically important goods that were produced in the Kaliningrad region can be carried out without special registration. An important point is that the company must have a certificate in its hands, which is issued by the Kaliningrad Chamber of Commerce and Industry. By the way, the exception does not apply to crude oil and its refined products.
What are intermediaries?
To date, the foreign economic activity of the constituent entities of the Russian Federation can be conducted both directly and through intermediaries. Moreover, the same organization can use two methods at once. It is important that intermediaries draw up a contract for the provision of such services.
By the way, intermediaries also relate to subjects of foreign economic activity, with the only difference being that they cannot carry out activities for which it is necessary to obtain special permission.
Even intermediaries who work through other intermediaries are also entities.
But we are a little distracted, let's talk about the competence of the subjects.
Subject Power
All that we said above is certainly important, but it’s even more important to understand what kind of power is vested in the subjects. To do this, you need to know how they are separated. So there is:
- General competence.
- Special competence.
As for the first, it is owned by the government of our country, the president, the Ministry of Industry and Trade of the Russian Federation. They are engaged in the exercise of rights in foreign trade.
One can say about special competence that the subjects of our country possess it. This also includes the Ministry of Finance, the Federal Customs Service, the Federal Service for Export and Technical Control, and others.
Consider in more detail the powers of all participants in the activity.
The president
What powers does the president have? Let's get it right.
- Defines the main directions of the trade policy of our country.
- Establishes restrictions and prohibitions on foreign trade in intellectual property, services or goods in response to international sanctions or in order to participate in them.
- It determines the procedure for the export and import of precious metals and stones into the country.
- Owns other powers.
State
The state as a subject of foreign economic activity can establish rules both for itself and for other countries. That is, the state carries out not only political organization, but also economic activity.
What are the powers? Now we will analyze everything in detail. The state, as a subject of foreign economic activity, has the right to regulate not only property, but also other relations, as well as to license certain types of activity and exercise control over the external economic situation. The state is also involved in civil law relations. Its powers extend to the conclusion of international treaties, participation in intergovernmental commissions and the creation of international organizations.
Russian Government
We have already dealt with the concept of the subject of foreign economic activity and is now considering the powers of these very entities. So let's not interrupt and move on. So, the government of our country:
- It ensures the implementation of the general trade policy in the state and implements it. In addition, the Government makes important decisions and ensures their implementation.
- Sets the rates of customs duties.
- It applies protective, countervailing and anti-dumping measures for foreign trade in order to protect Russia's economic interests.
- Introduces restrictions on the import and export of goods in accordance with international treaties and federal laws.
- It determines the procedure for maintaining and forming licenses issued by the federal bank.
- It solves issues related to the negotiation and signing of international treaties.
- It determines the procedure for the import and export of fissile nuclear substances.
- Establishes the procedure for the export from the country of those goods, some of which are state secrets.
As you can see, even the general appearance of subjects of foreign economic activity does not indicate a similarity of powers.
Ministry of Industry and Trade
This body regulates foreign trade activities. It is the Ministry that conducts investigations before the introduction of protective, anti-dumping, countervailing and other measures when importing goods. The authority also issues licenses authorizing the export or import of goods. It is important to understand that paper is required only in a situation where the product must be licensed.
Customs and Ministry of Finance
As for the FCS, it should control and oversee the customs area. It also has the functions of currency control.
The situation with the Ministry of Finance is slightly different. The body is responsible for the development of customs payments, foreign exchange transactions and determination of the customs value of goods.
In addition to these two bodies, different commissions and federal services are vested with special competence.
Foreign entities
We talked about the objects and subjects of foreign economic activity almost everything, only a little remains.
I would like to talk about foreign legal entities, and specifically about their legal personality. As a rule, recognition of legal personality takes place on the basis of multilateral or bilateral international treaties, mainly trade.
These papers always adhere to three legal doctrines, namely:
- National treatment.
- The principle of most favored nation.
- Special mode.
What does it mean? In the first case, both Russian and foreign participants have the same duties and rights, according to the legislation of our country. As for the principle of favoring, we are talking about a situation where all foreign legal entities have equal conditions on Russian territory. In the third case, the terms of international agreements and treaties are implied.
Based on this, it is necessary to establish to which state the legal entity belongs and whether it is such according to the laws of its country.
Foreign subjects of foreign economic activity are subject to international law. What does it mean? It is through international law that the status of a legal entity is determined, by which the legal capacity and liquidation procedure are established. These points are also affected by the nationality of the subject.
The legal status of a foreign entity is determined by generally accepted provisions from private international law, personal statute. The latter is defined as the rule of law of a particular country, which gives enterprises the properties of a legal entity and establishes the relations into which it is allowed to enter.
It is important that the personal statute is recognized not only in Russia, but also abroad. To determine the nationality of a legal entity, it is enough to apply certain doctrines.
In Russia, the subjects of legal regulation of foreign economic activity are determined by the country where the legal entity was established. To date, the nationality of the legal entity and the personal statute are no longer inextricably linked. This is due to the fact that more and more national legal entities with foreign capital appear, that is, the concepts simply ceased to coincide.
What is the result? Foreign entities in our country are legal entities and organizations in another legal form established outside the Russian Federation, stateless persons, citizens of other countries, permanently living outside the territory of Russia. As a rule, the vast majority of subjects are legal entities with different legal forms.
What is the legal status of subjects of foreign economic activity? Foreign entities are characterized by the following legal forms:
- Limited partnerships.
- Full partnerships.
- Anonymous societies.
- LTD.
- Production cooperatives.
Such familiar joint stock companies in Russia and Germany and obscure anonymous companies in countries where the Romance language is used have the same meaning as companies in England or corporations in the United States.
In Germany limited and full partnerships are not considered legal entities, but at the same time they enjoy the rights of the latter. That is, such partnerships have the right to conclude contracts, as well as act as a defendant or plaintiff in court.
Legal regulation of foreign economic activity of business entities determines the ability of individuals to be participants in foreign trade. To do this, they must be registered with the relevant state agency, and this must be done in the country where the person was born.
As for stateless persons, they must first obtain state registration of the entrepreneur in the country where they live permanently.
All foreign citizens who carry out their activities on the territory of our country (including individual entrepreneurs) have the same duties and rights as Russian citizens. Moreover, in Russia, the national regime is granted unconditionally.
Foreign entities are entitled to establish representative offices and branches on Russian territory, but provided that they have permission.
Representation
What it is? Let's look at the definition. Representation is a separate unit of a foreign legal entity located different from its location. The main duty of a representative office is to represent the interests of a legal entity in our country. They act on behalf of or on behalf of the company and work in accordance with Russian law.
In order to open a representative office, a foreign company must submit a written application to the accrediting body. We will tell about the accreditation procedure for subjects of foreign economic activity below, for now it is enough for you to know that such a body may be the Chamber of Commerce and Industry of Russia, a certain department or ministry.
What to write in a statement? First, the paper should contain the purpose of opening a representative office. Secondly, it is necessary to describe the scope of the enterprise. Well, and thirdly, to provide information on business relations with Russian enterprises, as well as on previously concluded commercial transactions and agreements. Naturally, it is necessary to describe in all details.
Together with the application, the charter of the legal entity, a bank statement on solvency, an extract from the trade register, a decision of the management body of a foreign enterprise on opening a representative office, a regulation on the representative office, a receipt confirming payment of the established fee are submitted.
All representative offices that have passed accreditation are entered in the Register of Representative Offices. In return for the legal entity receives a certificate. It is important to understand that the representative office does not have the status of a legal entity, which means that only the company that organized it is responsible.
When a representative office ceases to operate
Representation of a foreign company may cease to exist in our country for several reasons. Some of them:
- The permit has expired.
- The agreement concluded between Russia and another state has ceased to be valid. This is considered the basis only in the situation when this document was opened by agreement.
- Была ликвидирована фирма, представительство которой работало в РФ.
- Разрешение отозвал аккредитирующий орган из-за нарушения условий, на которых было разрешено открытие и работа представительства.
- Иностранная фирма сама решила закрыть представительство.
