Within the framework of the SES, a single economic constitution will be adopted.

At the summit of the Common Economic Space, which begins on Sunday, the presidents of the four countries will instruct that all the main regulatory acts of the organization be drafted by the end of 2004.

As Russian Energy Minister Viktor Khristenko reported, at the meeting in Yalta the leaders of Russia, Kazakhstan, Ukraine and Belarus "will set a firm deadline for the preparation of drafts of all regulatory acts of the CES."

According to Khristenko, this firm deadline will be the end of 2004. "I think that the CES leaders will instruct the governments to complete the drafting of the regulatory acts by the end of the year," he said.

At the same time, the Russian minister noted the fact that these six months are not a long period. "I am afraid to compare with European (integration) rates, how many times less this is - it's scary!", said Khristenko, who represents Russia in the CES High-Level Group.

He considers the pace of building the CES "unprecedented." "We were able from February 2003 not only to agree on and sign the agreement, but also to ratify it," Khristenko noted.

In turn, the official representative of the Russian Foreign Ministry, Alexander Yakovenko, reported that Moscow is "satisfied with the progress of work on forming the CES." "In the relatively short period of time that has passed since the signing of the founding treaty on September 19, 2003, quite a lot has been done," he said.

Meanwhile, a source in the Russian government drew attention to the difficulties that exist in forming the CES. In particular, said the interlocutor, each of the four CES countries has its own opinion regarding the documents that need to be adopted first.

"Kazakhstan is interested in reducing the tariff transport burden. Ukraine - in reducing the burden of railway tariffs. Among Russia's key interests is the establishment of national treatment for investments," he noted.

According to the source, work on the package of joint draft laws is currently complicated by the fact that some of the participating countries are trying to "pull out from the entire body of documents 10-15 regulatory acts that are of greatest interest to them, and push them through for the earliest possible coordination."

"In Moscow's opinion, such a path is unpromising," the source said. He said that the only way out of this situation is to adopt all documents as a package.

"The solution to the problem lies in combining them all into a codified document, making a kind of economic constitution of the CES, and within it already providing for multi-level and multi-speed integration," the source said.

According to the source, Kazakhstan and Belarus, in principle, agree that "the CES legislation" should be made common and comprehensive. Meanwhile, the Ukrainian side is trying "to make an extract from all 100-plus documents, singling out from them those that relate to the creation of a free trade zone without exemptions and restrictions."

In this connection, the source emphasized that in Moscow's opinion, "this issue (on the creation of a free trade zone) needs to be transferred to a bilateral Russia-Ukraine format."

At the same time, the interlocutor reported that during the recent visit to Moscow of Ukrainian Prime Minister Viktor Yanukovych, a schedule was agreed for the abolition of exemptions from the free trade zone concerning four groups of goods - confectionery products, sugar, alcohol and tobacco.

According to the source's information, the earliest date for the abolition of exemptions, depending on the commodity group, is 2005, and the latest is 2012.

The document may be prepared for signing at a meeting of the Russian-Ukrainian intergovernmental commission at the end of June - beginning of July this year.

Among the circumstances complicating the formation of the CES, the RIA "Novosti" interlocutor also named the internal political situation in Ukraine and, in particular, the October presidential elections. In this connection, he believes, all complex issues relating to the CES must be resolved with Ukraine in a bilateral format.

Touching on Kyiv's ratification of the Bishkek agreement on the "zero option" and Russia's transition to the principle of collecting VAT in trade in oil and gas by country of destination, the RIA "Novosti" source reported that "there can be no direct linkage here."

At the same time, he said, "we are ready to resolve the VAT issue, despite its cost to Russia of $800 million a year, if the problem with the 'zero option' is settled."

Ukraine is the only former Soviet republic that does not recognize the "zero option," under which, in particular, all foreign property and debts of the USSR passed to Russia.

At the same time, on Friday another government source told RIA "Novosti" that Russia does not plan to switch from 2005 in trade in oil and gas with Ukraine to the principle of collecting VAT by country of destination. Corresponding budget losses, estimated by experts at $800 million, will not be included in the draft federal budget for 2005, he said.