Global Trade Alert

Decree No. 817 of 19 August 2016 approved an allocation of 1 billion RUB (ca. 15.34 million USD) to producers of trolleybuses and tram wagons. 
 
The purpose of these subsidies is to:

• increase the production capacity of the manufacturers of trolleybuses and tram wagons, 
• preserve the levels of employment in this and other related sectors of the Russian economy,
• renovate the electricity-based transport vehicles on municipal level.

 
Decree No. 817 contains rules that clarify that these goals will be achieved by the concession of a fixed discount to the end buyers of trolleybuses and tram wagons. Decree No. 817 does not contain information with regard to the end buyers. Annex No. 1 of Decree No. 817 contains a list of vehicles and fixed discounts defined in thousand Russian Roubles per unit of vehicles' class.
 
Furthermore, Article 2 of Decree No. 817 specifies a production localisation condition that must be fulfilled in order the eligible beneficiaries (defined as the Russian municipalities) to be able to obtain state support. Concretely, the goods must be produced in the Common Economic Space of the Eurasian Economic Union not earlier than 2016.
 
The official explanatory note of Decree No. 817 discloses the information that in 2016 the Russian Government plans to subsidise the purchase of 110 units of transport with these subsidies (80 trolleybuses and 30 trams). It also clarifies that this state intervention belongs to the implementation decrees related to the "Plan for Development in the Economy in 2016".
 
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.