Global Trade Alert

On 15 February 2016 the Russian Government formally excluded foreign firms from various means of state support (Federal Law No. 23-FZ of 15 February 2016).

The federal law imposes a ban on the provision to foreign legal entities, including offshore companies, of state (municipal) support in the form of subsidies, budget investments and state (municipal) guarantees. An exception to this general ban constitutes the provision of state guarantees of the Russian Federation in order to support the export of industrial products (goods, works, services).

The federal law also amends the Budgetary Code of the Russian Federation. It introduces the condition that agreements for provision of subsidies and budgetary investments signed with juridical persons (with the exception of state and municipal entities) must contain a ban foreign currency to be obtained based on the provided state support.

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.