ANNOUNCEMENT 16 Aug 2016
In August 2016, the government of the Russian Federation announced a change in private-sector financial support.
NUMBER OF INTERVENTIONS
The Russian Government (2016). РАСПОРЯЖЕНИИЕ ПРАВИТЕЛЬСТВА РФ ОТ 16 АВГУСТА 2016 Г. N 1723-Р "О предоставлении государственных гарантий организациям оборонно-промышленного комплекса для выполнения государственного оборонного заказа". (Order of the Government of the Russian Federation of August 16, 2016 No. 1723-r "On granting state guarantees to the military-industrial complex organisations for execution of the state defense order"). Available at http://government.ru/docs/24217/
On 16 August 2016, the Russian Government (according to Resolution No. 1723-p) authorised the issuance of 7 state guarantees to 6 organisations of the Russian military-industrial complex at the total amount of 48.3 billion RUB (ca. 752.25 million USD as per the central RUB/USD exchange rate of the Central Bank of Russia for the same date).
This state interventions forms part of Russia's the implementing measures under the framework of the State Armament Programme for 2011--2020. The 6 organisations of the Russian military-industrial complex are:
Since the 6 beneficiaries of the state guarantees are enterprises, specialised in the manufacturing of missiles, helicopters, airplanes, as well as shipbuilding, research and development services, the GTA has indicated them as the respective affected HS codes and sectors.
Russia has established positions as a global exporter of weapons. However, the GTA has indicated as affected trading partners only the exporters under the indicated HS codes to Russia because the purpose of the issued state guarantees is to secure the full repayment of loans that the 6 mentioned beneficiaries in relation to execution of state defense orders on the basis of state contract with deferred payment. Hence, this state intervention can be expected to affect exports to Russia rather from Russia under the identified HS codes.
The maturities of the state guarantees were not disclosed. Since the credits they cover expire on 31 December 2020, it may be expected that the state guarantees will remain valid as a minimum until this date because they secure their repayment.
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.