ANNOUNCEMENT 21 Jul 2016

In July 2016, the government of the Russian Federation announced a change in private-sector financial support.

NUMBER OF INTERVENTIONS

1

  • 1 harmful
  • 0 neutral
  • 0 liberalising

SOURCE

The Russian Government (2016). РАСПОРЯЖЕНИИЕ ПРАВИТЕЛЬСТВА РФ ОТ 21 ИЮЛЯ 2016 Г. N 1561-Р "О предоставлении государственных гарантий организациям оборонно-промышленного комплекса для выполнения государственного оборонного заказа". (Order of the Government of the Russian Federation of July 21, 2016 No. 1561-r "On granting state guarantees to the military-industrial complex organisations for execution of the state defense order"). Available at http://government.ru/docs/23956/

Inception date: 21 Jul 2016 | Removal date: 31 Dec 2020

Loan guarantee

On 21 July 2016, with Decree No. 1561-p, the Government of the Russian Federation approved the issuance of credit guarantee for companies from the defense industry.
In total, the government issued 19 state guarantees to 14 organisations with an aggregate amount of RUB 93.6 billion (1.48 billion USD as per the official RUB/USD exchange rate for 21 July 2016).

The 14 beneficiaries are:

  1. JSC "Concern "Radio Technical and Information Systems";
  2. JSC "Concern Aerospace Defense "Almaz-Antey";
  3. JSC "Scientific-production complex "Scientific research Institute of distant radio communication";
  4. JSC "Corporation "Moscow Institute of thermal technology"";
  5. JSC "Aviation holding company "Suhoj";
  6. JSC "State machine-building design Bureau "Raduga" named after A. Y. Bereznyak";
  7. OJSC "Shipbuilding plant "Severnaya Verf"";
  8. JSC "Leningrad shipyard "Pella";
  9. JSC "Zelenodolsk plant named after A. M. Gorky";
  10. JSC "Shvabe - Defence and Protection";
  11. JSC "Kazan Optical-Mechanical Plant";
  12. JSC "Corporation of space systems of a special purpose "Comet"";
  13. JSC "Amur shipbuilding plant";
  14. JSC "Scientific-production Association "Alloy"".

This state intervention forms part of Russia's the implementing measures under the framework of the State Armament Programme for 2011--2020. According to Decree No. 1561-p, this state measure will expand the capacity of the beneficiaries to attract non-budgetary sources of funding and to carry out state tasks related to the execution of the state defense orders where the federal funding is received in the form of deferred payments.

Background:
The accompanying note to Decree No. 1561-p reports that the Russian Government has planned to allocate a total of 209 billion RUB in state guarantees in 2016 for the Russian defense industry. After the allocation under Decree No. 1561-p, the outstanding balance of to be issued in the future state guarantees is 115.4 billion RUB.

Disclaimer:
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.

Abbreviations:
JSC: joint stock company
OJSC: open joint stock company