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President of Russia Dmitri Medvedev:

Good afternoon once again to all those I've already met and to those whom I want to welcome here, including our colleagues from Moscow.

It is no accident that we have gathered here in Gagarin. It is a typical Russian city, beautiful, green, with a developing small business sector that naturally is going through all the problems and difficulties faced by small business in general in our country.

After taking office, one of the first decrees that I signed was the one dated 15 May: “On Urgent Measures aimed at Eliminating Excessive Administrative Restrictions on Carrying out Business Activity”. Under this decree, it was first and foremost assumed that we would prepare and adopt a series of regulations and laws. And as you know some such laws have already been adopted.

They have been adopted along with other federal laws.

We have a whole range of laws prepared to ensure, or pursuant to the decree to ensure, the protection of legal persons and individual entrepreneurs vis-a-vis state and municipal supervision.

We have already taken the first step. But that's it, nothing else. Unfortunately, the problems have not gone away. I am thinking of the challenges faced by our entrepreneurs wherever they do business, small business people and not only them. They are tortured by controls and all sorts of inspections designed to extort money. To sum it up, our law enforcement agencies and authorities must stop turning attempts to set up and run a business into a nightmare. Our colleagues responsible for the relevant law enforcement systems are sitting here today. In our country it is very important what signals get sent. You may want to consider it as a signal being sent. We have a law and a decree on this subject as well as other documents. But most important is the understanding of what may not be done.

On the other hand, those in business need to behave responsibly: they have to pay taxes and do business legally, within the normal legal constraints, and not make use of flagrant, anti-social means of tax dodging. It's understandable that no one likes to pay taxes and that everyone tries to find a way of paying as little as possible, but when businesses act in ways that end up reducing taxes by a factor of four or five, that is simply unacceptable.

As a result, we can say see how a vicious circle has been created: on the one hand, people extract money from business by all these illegal means, while business corrupts the law enforcement agencies. And if we don't break this vicious circle, everything will regress to the embryonic stage.

There's something else: all of these decrees and laws that I just mentioned will be totally useless, they will have absolutely no effect if we do not create a clearly favourable business climate in our country. We need a normal investment climate in our country. And this is a task for absolutely everyone here today, for the authorities in general, for law enforcement agencies and for business. Everyone must be involved in establishing the proper business climate. If we do not work on this together, nothing will come of it.

In order to put an end to this disgraceful situation, I would like to inform you that today I signed a plan on countering corruption, and we will begin work based on it very soon.