- “The rules concerning the provision of state support from the federal budget to the subjects of the Russian Federation included in the Governmental Program aimed at the provision of assistance to voluntary migration of fellow countrymen residing abroad to the RF” (approved by Resolution of the RF Government No.
622 of October 20, 2006);
- Resolution No. 665 of November 11, 2006, “On the approval of the quota con cerning the issuance of invitations for foreign nationals to enter the Russian Federation for performance of labor activities for year 2007”;
- Resolution No. 681 of November 15, 2006, “On the procedures governing the issuance of authorization documents as concerns performance of temporary labor activities by foreign nationals in the Russian Federation”;
- “Rules governing the issuance of authorization documents as concerns per formance of temporary labor activities by foreign nationals in the Russian Fed eration” (approved by Resolution of the RF Government No. 681 of November 15, 2006);
- Resolution No. 682 of November 15, 2006, “On the approval of the quota con cerning the issuance of work permits for foreign nationals arriving to the Rus sian Federation under procedures not requiring visas”;
- Resolution No. 683 of November 15, 2006, “On the approval of the acceptable share of foreign employees used by economic agents operating in the sphere of retail trade in the territory of the Russian Federation”;
- Resolution No. 783 of December 22, 2006, “On the procedures governing de termination of requirements concerning the attraction of foreign employees and formation of quotas for performance of labor activities by foreign nationals in the Russian Federation by executive agencies (enters into force since January 15, 2007);
- The Rules governing determination of requirements concerning the attraction of foreign employees and formation of quotas for performance of labor activities by foreign nationals in the Russian Federation by executive agencies;
- Resolution No. 797 of December 23, 2006, “On the approval of the Regulations concerning the licensing of activities related to employment of citizens of the Russian Federation outside the Russian Federation”;
RUSSIAN ECONOMY IN trends and outlooks - Regulations concerning the licensing of activities related to employment of citi zens of the Russian Federation outside the Russian Federation”;
- Resolution No. 798 of December 23, 2006, “On the approval of the procedures governing the submission of notification on the attraction and use of foreign na tionals arriving to the Russian Federation under procedures not requiring visas” (published on December 31, 2006, enters into force since January 15, 2007).
As it follows from the list indicated above, three of four legislative acts and the majority of supplementary regulatory documents concern legalization of activities performed by labor migrants and the struggle against illegal migration. The innova tions introduced by these documents can be summed up as follows:
- the institute of registration of foreign nationals has been abolished; there has been introduced registration of migrants based on the notification procedure, therefore, nobody has the right to refuse to register a foreign national;
- foreign nationals may be registered both at their places of residence and em ployment;
- employers has been granted the option to submit applications for Permits for attraction of foreign employees not only in person, but also by mail (registration of migrants is also possible in person or by mail notification); on the basis of the issued permits employers should make labor contracts with the attracted for eign nationals and forward the respective data to regional employment agen cies and tax inspections. It should be noted that each foreign employee should have a work permit. Absence of such permits should be the basis for suspen sion of Permits for attraction and use of foreign labor issued to employers;
- the new legislative initiatives classify foreign employees depending on the fact if the exchange between Russia and the respective countries is regulated under a visa regime or is visa free (CIS member countries with the exception of Turk menistan and Georgia);
- employers have to obtain and transfer to foreign employees arriving from the countries with visa based exchange work permits prior to the start of their work in Russia; as concerns employees not needing visas, they have the right not to submit applications personally; however, in any case they need migration cards;
- there has been significantly reduced time, within which state authorities should hand employers and migrants the respective authorization documents;
- there have been significantly increased fines (up to Rub. 800 thousand) and toughened measures with respect to employers attracting and using labor of foreign employees staying in Russia without the duly made documents;
- there has been adopted a new version of article 18.10 of the RF Code of Admin istrative Offences in accordance with which illegal performance of labor activi ties by a foreign national or a stateless person should result in a fine ranging from 20 to 50 minimal wages and (optional) administrative deportation from Russia;
- there has been introduced a new administrative offence – infringement on the regulations pertaining to the entry in the Russian Federation of a foreign na tional or a stateless person or the procedures governing the stay (residence) of Section Social Sphere such persons in the Russian Federation, including those where the announced aims of entry in Russia is at variance with the activities actually performed in the period of stay (residence) of such persons, infringement on the rules of regis tration of migrants, travel or the procedures governing the choice of the place of stay or residence;
- there have been envisaged penalties concerning Russian citizens providing housing or transportation to foreign nationals or stateless persons staying in the territory of Russia, which infringe on the established procedures and rule of reg istration of migrants;
- there have been introduced restrictions (in some cases even prohibition) with respect to the acceptable share of foreign employees in the sphere of retail trade;
- there has been introduced a quota (6 million persons for year 2007) as con cerns the attraction of foreign employees arriving to Russia under a visa free procedure; the quota pertaining to the issuance of invitations to foreign nation als arriving to Russia in order to perform labor activities makes 308842 in 2007;
- it has been allowed to suspend Permits for attraction and use of foreign labor issued to employers in the cases where employers fail to notify migration agen cies about the places of temporary stay of foreign employees within 3 days, where employers fail to notify tax authorities, under the jurisdiction of which these employers are, about the arrival of foreign nationals to their places of work or residence within 10 working days, and where employers fail to notify migration agencies about infringements on the terms of labor contracts or civil law work contracts on the part of foreign employees within 3 days.
4.3.2. Economic consequences of the legislative process concerning migration Let us attempt to evaluate the economic consequences of the legislative acts indicated above not touching on the social and humanitarian context of these acts.
The newly introduced provisions are primarily aimed at the separation of labor flows from the CIS member countries, from where on the visa free basis the overwhelm ing number of foreign employees arrives to Russia, and those arriving under visa regimes. In order to legalize employees arriving without visas there has been abol ished a number of provisions; however, at the same time there was introduced a package of new stipulations, which include industry specific shares of foreign em ployees and quotas. Simultaneously, the RF Code of Administrative Offences intro duced some significantly more tough penalties with respect to RF citizens using la bor of foreign employees without the respective registration required by law, or renting their housing or vehicles to such employees. Therefore, behind the faç ade of liberalization of the labor migration treatment there is seen the intention to regu late many of its aspects.
Expert estimates of the number of foreign employees working in Russia throughout the year (4.9 million persons4) reveal that the quota set for year 2007 (million employees, or 9 per cent of the average annual number of all employees in Mukomel V. I. Migratsionnaya politika Rossii (Russian migration policy). M., 2005. pp. 196 – 197.
RUSSIAN ECONOMY IN trends and outlooks the Russian economy) should not seriously limit the number of invited foreign em ployees5. According to the Government’s resolutions concerning quotations, re gional quotas should be determined in advance and may be adjusted throughout the year. However, in spite of the documented data, on which the quotas should be formed (December 15, 2006), even in early January of 2007 regional quotas were not made public yet. This lack of information in such a large and spatially diverse country as Russia is a rather disquieting circumstance. This uncertainty may have the most negative results in Moscow and St. Petersburg, as well as in other regions accumulating large flows of foreign labor: delays relating to the approval of quotas accompanied by the general underdevelopment of the service migration infrastruc ture will create serious problems for migrants wishing to obtain a legal status and will form fertile ground for a growth in corruption. It is estimated that for Moscow the quota for attraction of foreign labor will make 600 thousand persons, including 150 thousand migrants with visas and 450 thousand migrants without visas6. It is yet unclear what can happen with the migrants staying in Moscow in the excess of the planned quota.
It is important that the migrants, who have arrived to Russia prior to the en actment of the new legislative documents, will have first to leave the country and come back later, since it involves significant expenses. Different studies carried out in Russia reveal that illegal employment is most widespread in the country, and per cent of illegal migrants work7. A significant share of this group (at least one third) consists of the migrants, who have been staying in Russia for a long time; of ten such migrants have families and sometimes have no ties with countries of their origin.
The new legislative documents do not envisage any options of setting “floating quotas,” which is important and profitable for certain categories of employers: for instance, even in the case they need seasonal workers they will have to obtain an nual permits and pay the respective state duty. As it turns out, in order to avoid fre quent rotation of workers employers operating in such industries as construction or agriculture will be interested to either register their employees for longer periods, or attract laborers able to perform different operations, for instance painting and electrical works. This situation is unfavorable primarily for small and medium sized companies, since large companies will be able to shift workers from one project to another.
A similarly important problem is related to the fact that foreign migrants are prohibited for employment in retail trade. There are several economic conse quences of this decision.
The Federal Migration Service of Russia evaluates the number of migrants from the CIS member countries present in Russia to make 10 million persons, i.e. it is significantly above the quota intro duced on the initiative of this organization.
Pertseva E. Kvota na gastarbaitera (Quota for the migrant worker) // Gazeta. December 1, 2006.
Problemy nezakonnoi migratsii v Rossii: realii i poisk resheniy (po itogam sotsiologicheskogo ob sledovaniya) (Problem of irregular migration in Russia: reality and search for solutions (results of the sociological survey) / IOM, Bureau of the International Organization for Migration in Russia. M.:
Gendalf, 2004. p. 497.
Section Social Sphere The Russian labor market, which has been characterized by “non market” be havior for a long time since the beginning of market reforms, is, in fact, only form ing, the mechanisms of its internal tuning are not completely clear, and the real re gional occupational proportions lack clear understanding8. In this situation, attempts to regulate one dynamically developing sector of the economy9 across the whole territory of the country seem to be an example of a premature decision failing to take into account regional specifics. In a number of Russia’s regions, especially those neighboring with Ukraine and, especially, with China, the consequences of implementation of Resolution No. 683 can seriously complicate life of the local population, which is used to buy clothes and footwear (at least) at Chinese, Viet namese, Ukrainian and other ethnic markets. Here, it should be noted that there have already been made certain attempts to replace foreigners with Russia’s citi zens in the Far East and in Siberia; however, all these attempts completely failed:
markets practically suspended operations, but the number of domestic vendors there did not grow10.
Besides, the measures undertaken by the government to improve competi tiveness of domestic goods as compared with goods imported to markets by mi grants should result in a growth in prices and higher inflation rates, especially in border towns and regions. However, it can hardly be expected that foreign employ ees really leave this sector of the economy. Most probably, there will occur yet an other surge of shadow economy in this sphere, what no doubt bring about all usual consequences: growing prices of goods including all “migration risks”, rampant corruption, increasing staff of regional governmental agencies engaged in the en forcement of the new Resolution.
An analysis of the data collected in the course of different sociological surveys of migrants reveal that retail trade absorbs from 25 per cent to 45 per cent of for eign employees11. Simple computation demonstrates the following: