Global Trade Alert

With Decree No 425-8 of 16 May 2016 the Russian Government approved the state programme for the development of the military-industrial complex (2016--2020).

The planned to be allocated state subsidies are to be at the amount of 34,893,260,000 RUB (537,393,155 USD as per the official RUB/USD exchange rate for 16 May 2016). The break-down of these subsidies in the period 2016-2020 is as follows:
 

• 2016 - 7,603,200,000 RUB;
• 2017 - 6,597,020,000 RUB;
• 2018 - 6,908,680,000 RUB;
• 2019 - 6,893,680,000 RUB;
• 2020 - 6,890,680,000 RUB.

 
The purpose of this state programme is to increase the competitiveness of the production of the military-defence industry on the basis of the realisation of its innovative potential and promotion of its development. Also an explicitly stated state goal is the increase of the exports of this industry.

The foreseen state interventions that are likely to affect foreign commercial interests are:

• state subsidies for partial reimbursement of interest rates, related to credits, taken from Russian credit organisations and the state corporation "Vnesheconombank".
• state subsidies for strategical organisations that belong to the Russian military-industrial complex.

 
The text of the state programme contains concrete monitoring indicators on which basis its effectiveness is to be monitored. However, there is no indicator with local or other potential protectionist content.

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.