Global Trade Alert

Rossiyskaya Gazeta, an official newspaper of the Russian government, Issue 6464 of 26 August 2014, reports that the Ministry of Economic Development has proposed to ban the state-owned Vnesheconombank to enter into transactions with companies, the ultimate beneficiaries of which are legal entities registered in tax havens. 
 
There is no explicitly formulated condition that the law targets Russian or foreign-owner companies, registered in offshore zones. However, the implementation can be expected to be in line with an earlier statement of the President of the Russian Federation, Mr Vladimir Putin in his Annual Presidential Address to the Federal Assembly held on 12 December 2013, in which he declared: "Companies, registered in foreign jurisdictions, must not benefit from state support, including support from Vnesheconombank and state guarantees. Their access to contracts for state orders and for contracts with structures with state participation must be eliminated".
 
The GTA includes state guarantees and other financial incentives that are likely to affect the restructuring and performance of firms facing international competition, whether from imports, in export markets, and from foreign subsidiaries.