IMPLEMENTATION LEVEL

National

AFFECTED FLOW

Inflow

ANNOUNCED AS TEMPORARY

Yes

NON-TRADE-RELATED RATIONALE

No

ELIGIBLE FIRMS

all

JUMBO

No

TARIFF PEAK

No
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Inception date: 16 Aug 2016 | Removal date: 31 Dec 2020
Still in force

Loan guarantee

On 16 August 2016, the Russian Government (according to Resolution No. 1723-p) authorised the issuance of 7 state guarantees to 6 organisations of the Russian military-industrial complex at the total amount of 48.3 billion RUB (ca. 752.25 million USD as per the central RUB/USD exchange rate of the Central Bank of Russia for the same date).
 
This state interventions forms part of Russia's the implementing measures under the framework of the State Armament Programme for 2011--2020. The 6 organisations of the Russian military-industrial complex are:
 

  • Federal State Unitary Enterprise "State Space Scientific Production Center Khrunichev"
  • GCSO "Granit"
  • Rostov Helicopter Production Complex "Rostvertol"
  • "United Shipbuilding Corporation"
  • "Scientific-Production Corporation "Irkut"
  • "Corporation "Tactical Missile Armament".

 
Since the 6 beneficiaries of the state guarantees are enterprises, specialised in the manufacturing of missiles, helicopters, airplanes, as well as shipbuilding, research and development services, the GTA has indicated them as the respective affected HS codes and sectors.
 
Russia has established positions as a global exporter of weapons. However, the GTA has indicated as affected trading partners only the exporters under the indicated HS codes to Russia because the purpose of the issued state guarantees is to secure the full repayment of loans that the 6 mentioned beneficiaries in relation to execution of state defense orders on the basis of state contract with deferred payment. Hence, this state intervention can be expected to affect exports to Russia rather from Russia under the identified HS codes.
 
The maturities of the state guarantees were not disclosed. Since the credits they cover expire on 31 December 2020, it may be expected that the state guarantees will remain valid as a minimum until this date because they secure their repayment.

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.

AFFECTED COUNTRIES

MAP
TABLE
EXPORT

AFFECTED SECTORS AND PRODUCTS

447 Weapons & ammunition & parts
9306 Bombs, grenades, torpedoes, mines, missiles and similar munitions of war and parts thereof; cartridges and other ammunition and projectiles and parts thereof, including shot and cartridge wads.
930629 Other
930690 Other
493 Ships
8901 Cruise ships, excursion boats, ferryboats, cargo ships, barges and similar vessels for the transport of persons or goods.
890110 Cruise ships, excursion boats and similar vessels principally designed for the transport of persons; ferryboats of all kinds
890120 Tankers
890130 Refrigerated vessels, other than those of subheading 8901.20
890190 Other vessels for the transport of goods and other vessels for the transport of both persons and goods
496 Aircraft & spacecraft; parts
8802 Other aircraft (for example, helicopters, aeroplanes); spacecraft (including satellites) and suborbital and spacecraft launch vehicles.
880211 Of an unladen weight not exceeding 2,000 kg
880212 Of an unladen weight exceeding 2,000 kg
880220 Aeroplanes and other aircraft, of an unladen weight not exceeding 2,000 kg
880230 Aeroplanes and other aircraft, of an unladen weight exceeding 2,000 kg but not exceeding 15,000 kg
880240 Aeroplanes and other aircraft, of an unladen weight exceeding 15,000 kg

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