ANNOUNCEMENT 07 Apr 2015In April 2015, the government of Belarus announced a change in private-sector financial support.
NUMBER OF INTERVENTIONS
02.04.2015 146 ? 2015 ?
20 2016 . 17
Presidential Decree No. 146 of 2 April 2015 introduces rules for state support that benefits juridical persons of Belarus, operating in its agricultural sector, for their purchase of modern machinery and equipment under the terms of financial leasing from the national leasing lessor, the state-owned "Promagroleasing".
The leasing conditions under Presidential Decree No. 146 can be summarised as follows:
(In accordance with Decree of the President of the Republic of Belarus of 24 January 2013 No. 45, 62.5% of state shares of the Company were passed into the statutory fund of the state-owned Bank of Development of the Republic of Belarus).
This interest rate is below market rate because the refinancing rate of the Central Bank of Belarus used by commerical bank as a benchmark on top of which they compile their lending rates has been set at 25% per annum in 2015.
*The decree defines 'agricultural organisations' as 'legal entities, including their subdivisions, the main activities of which are agricultural production, fish farming, harvesting and processing of Belarusian agricultural products, provision of services in the area of crop and livestock production as well as veterinary, ameliorative works and provision of services for agriculture'.
The state-owned Bank of Development of the Republic of Belarus is to provide credits to "Promagroleasing" in order it to develop its leasing activity concerning the above-mentioned deals with maturity until 1 January 2023.
Article 3 of Presidential Decree No. 146 contains concrete monetary break-downs of the subsidies, distributed to selected regions of Belarus for the development by them fishery and agricultural activities under financial leasing. The subsidies' total amount is 231.2 billion BYR (ca. 15.01 million USD as per the official BYR/USD exchange rate for 2 April 2015, available at: http://www.nbrb.by/engl/statistics/rates/ratesDaily.asp?date=2015-02-02).
Presidential Decree No. 17 of 20 January 2016 introduces changes in Presidential Decree No. 146 by increasing these subsidies with 8.65% in 2016 and by allocating additional 115 billion BYR (ca. 5.63 million USD as per the official BYR/USD exchange rate for 20 January 2016, available at: http://www.nbrb.by/engl/statistics/rates/ratesDaily.asp?date=2016-01-20) for development of the fishery and the agricultural industry.
Presidential Decree No. 146 also contains a list of agricultural machinery and equipment that is eligible under the state subsidisation scheme. However, it is not possible to identify their HS code in all cases. Therefore, conservatively, the GTA has indicated only the affected sectors.
Presidential Decree No.146 enters into force on the date of its official publication, 7 April 2015.
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.