FAS Reported on Financial Security for Tour Operators
OREANDA-NEWS. November 11, 2008. Adopting any of the two draft legislations "On Introducing Amendments to Article 17-2 of the Federal Law "On the Basis of Tourist Operations in the Russian Federation", introduced to the State Duma by deputies V.Reznik and A.Koval, will have significant adverse consequences for the market of international tourist in the Russian Federation, reported the press-centre of FAS Russia.
This is the content of the letters sent by the Federal Antimonopoly Service (FAS Russia) to I. Shuvalov, the First Deputy of the Chairman of the Government of the Russian Federation, A.Loginov, the Plenipotentiary of the Government of the Russian Federation in the State Duma, V.Mutko, the Minister of Sport of the Russian Federation, and Ye. Fedorov, the Chairman of the Committee of the State Duma of the Russian Federation on Economic Policy and Entrepreneurship.
The letters state an official position of the antimonopoly authority, elaborated as the outcome of the discussion at the meetings in FAS Russia of the two same-title draft legislations on increasing financial guarantees of tour operators from 10 million Rubles to 150 and 100 million Rubles accordingly.
FAS Russia believes that increasing financial security for tour operators, which equalizes tour operators who provide different volume of services, cannot achieve socially important goals declared in the draft legislations. For instance, according to the experts, tour operators effectively are responsible to the consumers of tourist services for the signed but not yet executed contracts. On average, such contracts constitute 10 - 15% of annual sales. However, percentage of such contracts varies depending on seasonal demand fluctuations.
At the same time, the sums of financial security, proposed in the draft legislations, are not related to the actual scope of liability of tour operators under the contracts with customers on selling tourist services. For the largest Russian tour operators 100 million Rubles is around 2 % of the company's annual turnover.
In the FAS Russia's opinion, adopting any of the two draft legislations will not protect the clients of the largest tour operators because the proposed financial guarantees are not sufficient in relation to the offered services. Setting the financial security of 100 or 150 million Rubles is inadequate for the tour operators with annual turnover up to 50 million Rubles, and such operators are majority on the market of tourist services.
The antimonopoly authority is convinced that multifold increase of financial security infringes the interests of small and medium tourist businesses, because it can result in restricting competition on the tourist market, monopolizing regional markets and, finally, reducing the range of tourist services and increasing their costs.
The requirement for financial security for the tour operators of inbound tourism is excessive and ungrounded as in this case the risks are borne by foreign tourist companies who provided the tourist package.
FAS Russia believes that the amount of financial security for outbound tourism must be proportionate to the real scope of liability in accordance with he contracts singed with the consumers of tourist services, but no less than 10 million Rubles.
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