FEDERAL LAW NO. 120-FZ OF JULY 21, 1997
           ON THE TAX ON THE PURCHASE OF FOREIGN LEGAL TENDERS
             AND INSTRUMENTS DENOMINATED IN FOREIGN CURRENCY
              (WITH AMENDMENTS AND ADDENDA OF JULY 16, 1998)                            

Adopted
by the State Duma                                           June 13, 1997

Approved
by the Federation Council                                   July 3, 1997



     Article  1. The present Federal Law introduces a tax levied  on  the
transactions  of  the purchase of foreign legal tenders  and  instruments
denominated  in  foreign currency (hereinafter referred  to  as  "foreign
currency in cash").



     Article  2.  Tax  base shall be a sum in roubles  payable  when  the
following transactions are implemented:
     the purchase of foreign currency in cash for roubles in cash;
     the  purchase  of  instruments denominated in foreign  currency  for
roubles  in  cash;  the  disbursement of foreign currency  in  cash  from
foreign currency accounts to natural persons, provided these monies  have
come  to the foreign currency accounts from rouble accounts; the purchase
of  the foreign currency legal tenders not subject to circulation due  to
defects;
     the  handing out of foreign currency to the owners of plastic  cards
from rouble card accounts.
     The tax base shall include sums of the repayment of deposits open in
roubles if the repayment is effected in foreign currency in cash.
     Not  subject to taxation with the tax shall be transactions  of  the
disbursement  of  foreign currency in cash as the repayment  of  deposits
open in foreign currency including the handing out of foreign currency in
cash from foreign currency accounts.
     Also  not taxable with the tax shall be transactions of the purchase
of foreign currency in cash by credit organisations from the Central Bank
of the Russian Federation as well as from other credit organisations.

     Article 3. The payers of the tax on the purchase of foreign currency
shall  be  the  natural persons, organisations as well  as  branches  and
representative   offices   including   non-residents   implementing   the
transactions specified under Article 1 of the present Federal Law.
     The  organisations  whose activities are fully  funded  out  of  the
budgets  of  all  levels  as  well as the Central  Bank  of  the  Russian
Federation shall not be payers of the tax.



     Article 4. The tax rate is hereby set at 1 per cent of the tax base.

     Article  5.  The  tax shall be withheld by the credit  organisations
implementing  transactions with foreign currency in cash  at  the  moment
when  payers  receive foreign currency in cash. The  tax  sums  shall  be
remitted  by the said credit organisations to the federal budget  and  to
the   budgets  of  the  subjects  of  the  Russian  Federation  on  whose
territories transactions of the purchase of foreign currency in cash have
been effected not later than the day following the date when the tax  was
withheld.



     Should  the  sums  of a respective tax fail to be  remitted  or  are
remitted with a delay to the budgets, the said credit organisations shall
be  held  accountable under Articles 13 and 15 of the Law of the  Russian
Federation on the Fundamentals of Tax System in the Russian Federation.

     Article  6.   The sums of the tax shall be distributed  between  the
federal  budget and the subjects of the Russian Federation at a ratio  of
60 to 40 per cent respectively.
     The  legislative  (representative) bodies of  the  subjects  of  the
Russian  Federation  are entitled to make decisions on  entering  in  the
budgets  of the whole sum or a part of the sum of the said tax coming  to
their budgets.

     Article  7. The State Tax Service of the Russian Federation  on  the
approval  of  the  Ministry  of Finance of the Russian  Federation  shall
within  two  weeks from the date of the coming into force of the  present
Federal  Law endorse the instructions for the application of the  present
Federal Law.



     Article  8. The present Federal Law shall come into force  from  the
date of the official publication thereof.
     The  President of the Russian Federation is hereby proposed and  the
Government of the Russian Federation is hereby instructed to bring  their
legal acts in conformity with the present Federal Law.

     President
     of the Russian Federation                                 B.Yeltsin

     Moscow, the Kremlin