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President Vladimir Putin: Mikhail Yefimovich [Fradkov], I know that you are ready to report on immigration issues and on the steps the government is taking to bring order to the retail sector.

Prime Minister Mikhail Fradkov: Yes, you gave the instruction and we have been working on it. Today is the deadline for preparing the main documents that aim at considerably clarifying the legal base in this area. Our position is that there was a real need to take practical steps to bring order to labour immigration procedures and bring order, too, to the country’s retail markets by improving the sanitary situation and putting in place conditions encouraging Russian producers, above all, to trade at these markets. I have signed a number of government resolutions in this area and they will be published today.

In particular, we are increasing employers’ responsibility for hiring foreign workers, regardless of whether they need visas or not to be in Russia. In other words, there will be one set of rules for all foreign workers. We have raised the demands both on employers and on the foreign citizens or stateless persons hired, in the event that they violate the new rules being introduced. For example, in 2007, we will introduce new rules setting restrictions on the use of foreign labour in a number of sectors of the economy. These rules, which will take effect as from January 1, 2007, will apply above all to retail trade of alcoholic beverages and pharmaceutical goods. The government has decided to reduce the share of foreign labour in this sector to practically zero.

As for retail trade of all descriptions carried out at stalls and markets, we will give this sector a transition period from January 15 to April 1, 2007, during which the share of foreign labour in the sector can be no more than 40 percent, and then, as from April 1, 2007 and through to the end of 2007, the share of foreign labour in this sector will be lowered to zero. In other words, we are setting restrictions on the possibility of hiring foreigners to work in retail trade at stalls and markets.

Vladimir Putin: The share of foreign labour will be zero from April 1 to the end of the year, or simply from April 1 onwards?

Mikhail Fradkov: It will be zero as from April 1, but this will apply only to 2007. We are introducing these restrictions only for 2007 at the time being, because we need to see how the new rules will work in practice. Perhaps there will be a need to make some adjustments as we go. But this is a decision that has been approved and set out as a government resolution. Furthermore, we drafted these decisions together with the regional leaders and with the State Duma deputies and set quotas for foreign labour in Russia. The quota for foreign workers requiring a visa to enter in Russia has been set at a little over 300,000 in 2007 – 308,000 to be precise, and the quota for foreign workers who do not need a visa to enter Russia has been set at 6 million for 2007.

We are continuing to work on the regulations that would stipulate the procedures according to different professions and regions. In this respect, it is up to the regions to assess their demands for foreign labour and make the necessary decisions, and we are taking this approach because we do not want to introduce draconian measures, and we recognise the need to take into account different demands for labour, but we want this to go ahead within a framework of rules that will be clear to everyone; clear to the regions, and clear to the foreigners who want to work honestly in Russia.

Vladimir Putin: Yes, in this area we do need to assess where foreign labour is needed and in what volumes. Regarding the retail trade situation, I think the government has made the right decision, and though you propose that the new rules would apply only through to the end of 2007, I see no reason why it should be necessary to make changes after 2007. We have no labour shortage in the retail sector. We have enough labour of our own in this area. Of course, we have to take a closer look at the situation in other sectors where foreign labour is employed. We will have to look at the impact the measures we take have on the labour market in order to ensure that our companies and economy in general do not face a labour shortage.

Mikhail Fradkov: Yes, Vladimir Vladimirovich, but these government decisions also involve changes to the current legislation in order to create the legal base in this area. One law has already been passed and you have signed it. This was the law making clarifications to the Code of Administrative Violations and aimed at increasing employers’ responsibility for hiring foreign workers and ensuring the necessary conditions for their work in Russia. At the same time, we have drawn up two draft laws together with the State Duma deputies, and these laws are currently before the Duma. One is on increasing liability for complying with trade rules, and the other is the draft law on retail markets. I think this is serious work and it requires additional time, but it will ultimately improve the situation at markets in general in Russia. This is not something we can do overnight. It is a complex task, but we are committed to bringing order to this sector as rapidly as possible, and we need to do this within the framework of the law.

Vladimir Putin: I will be meeting this week with the State Duma deputies, with United Russia, and we will discuss this issue in more detail.