ANNOUNCED AS TEMPORARYNo
Interest payment subsidy
On February 13, 2015 Order 223-p was approved. This Order was issued within the framework of the State program for agricultural development and regulation of agricultural products, raw materials and foods for the period 2013-2020.
Concretely, the purpose of Order 223-p is to co-finance in 2015 liabilities of the subjects of the Russian Federation (the constituent entities or the top-level political divisions according to the Constitution of Russia) related to the interest rate on short, medium and long-term loans taken by small forms of business from Russian banks and credit cooperations. The purpose of the loans is development of crop production, as well as processing and marketing of crop production. The state aid is at the amount of 7,618,700,000 Russian Roubles (approximately 122 million USD).
This state measure is in line with the 2012 statement of the President of the Russian Federation, Mr Vladimir Putin, that the interests of the economic sectors, agriculture included, who meet the most intensive competition from abroad after the WTO accession, will be considered.
Furthermore, in the Annual Presidential Address to the Federal Assembly held on 12 December 2013, Mr. Putin declared: "Companies, registered in foreign jurisdictions, must not benefit from state support, including from Vnesheconombank and state guarantees. Their access to contracts for state orders and for contracts with structures with state participation must be eliminated". In conclusion, although the end beneficiaries of the allocated subsidies to the subjects of the Russian Federation cannot be directly identified, it can be expected that they will be Russian.
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.
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