Jun 02, 2006: Section 911 Tax Increase and Results of Washington Visit

June 2, 2006
Moscow

Members and Friends of the American Chamber of Commerce in Russia,

1.  May 2006 Door Knock

The AmCham Russia Door Knock delegation – Chevron, Citibank, GM, Sun Microsystems, Alcoa and John Deere – to Washington, DC May 2-4 encountered both balanced perspectives on current Russian policy trends and viewpoints ranging from confusion and frustration to skepticism and deep concern. The hot buttons were energy security, intellectual property rights, democracy, WTO and Iran. The sustained success of AmCham companies in Russia was not well known, but favorably impressed even those who held negative opinions about Russia. The same positive impact was registered by our suggestions that AmCham business may be a vital change agent in transforming values in Russia.

Some Outcomes and Action Steps:

As you will note from the list of our Door Knock hosts below, we leveraged the visit to implement initiatives in our 2006 Washington strategy approved by the Board in November 2005 to extend the reach and diversity of the Door Knock and engage think tanks and Washington insiders.

Door Knock hosts:
 

The U.S. Secretary of Commerce, the Chief Economist for the Center of Strategic and International Studies, the Assistant Secretary of Energy International, the Deputy Assistant Secretary of Defense for Eurasia, the Acting Chairman of the Advisory Council for the Department of Homeland Security, the Assistant Secretary of State for Europe, the National Security Advisor to the President on Russia, the President of The Nixon Center, leading Senators and Congressmen, and the WTO chief negotiator.

2.  U.S. Income Tax Increase for Expatriates Working in Russia:

President Bush signed into law a significant increase in U.S. income tax for U.S. citizens working abroad, including Russia, retroactive to January 1, 2006. The marginal tax rate on the Section 911 $80,000 exclusion benefit will go up and the housing exclusion will go down to $11,000. This provision slipped into the overall tax legislation package at the last moment, catching trade associations and tax watch groups completely by surprise. The AmCham HR Committee and AmCham Tax Committee are working on analyses to demonstrate the negative impact as we develop a strategy to seek Congressional reversal of this discriminatory tax. We are also working with the committees to take advantage of certain administrative discretion permitted on easing the burden of the housing exclusion limitation. Last week I had extensive discussions with AmCham representatives from different countries at the U.S. Chamber of Commerce in Washington. I also obtained a copy of a bill to be proposed by Sen. Jim DeMint (R.) from South Carolina to reverse this legislation and which we intend to support. We will keep you advised of developments and will seek the active participation of AmCham American nationals at the appropriate strategic moment.

3.  AmCham Policy Work

The Chamber continued its active engagement with U.S. and Russian government officials.  Some of the recent AmCham highlights include:
 

• On June 2, AmCham hosted a meeting with Robert Cresanti, Under Secretary for Technology Administration, U.S. Department of Commerce.
• On June 2, AmCham St. Petersburg members took part in a breakfast briefing with me and the AmCham St. Petersburg Chapter Executive Director for 10 members of the U.S. House of Representatives, led by Rep. Joel Hefley (R-Colorado), Chairman of the House NATO Parliamentary Assembly (NATO/PA).  The meeting was hosted by the U.S. Consul General in St. Petersburg.
• On June 1, AmCham hosted a briefing with Ken Myers, a key policy advisor and staff director for Sen. Richard Lugar, Chairman of the U.S. Senate Foreign Relations Committee.
• On May 31, AmCham hosted a roundtable breakfast with U.S. Secretary of Education Margaret Spellings.  
• On April 28, AmCham hosted a Regional Briefing with a senior level delegation from Tatarstan, led by Ravil Muratov, First Deputy Prime Minister of the Republic of Tatarstan.
• On April 7, AmCham hosted a Regional Briefing with Sergei Gaplikov, Chairman of the Chuvash Republic Cabinet of Ministers.
• On April 6, AmCham held a Policy Roundtable featuring Robert Koopman, Director of the U.S. International Trade Commission’s (ITC) Office of Economics.
• On March 15, I spoke at the plenary session of the “North-West Russia: New Investment Opportunities” Forum, organized by the Office of the Plenipotentiary Presidential Envoy in the North-West Federal District. 
• On March 14, AmCham hosted a roundtable breakfast with U.S. Secretary of Energy Samuel Bodman. 
• On March 13, AmCham hosted a roundtable breakfast with U.S. Deputy Secretary of Commerce David Sampson.

4. NGO Registration:

AmCham Russia continues to monitor the implementation of procedures to register foreign non-governmental organizations and to engage Russian officials responsible for registration and subsequent financial reporting. Last week over 60 NGO representatives met at AmCham with our NGO Committee to hear a presentation from the Director of the Department for Political Parties, Social, Religious and Other Organizations, Federal Registration Service on the registration process. To date 40 foreign NGOs had registered without a problem. The entire session lasted two-and-a-half hours, with numerous and varied follow-up questions and responsive answers. AmCham will continue its engagement with the Russian government on the NGO registration and financial reporting requirements to demystify the process for our member NGOs.
 

Andrew B. Somers
President

I welcome and encourage your comments and suggestions with regard to these and other issues, as well as any AmCham activity. Please send messages to president@amcham.ru 

For additional information and hot news please visit us at www.amcham.ru.
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