ANNOUNCEMENT 24 May 2017
On 24 May 2017, the Government of Russia approved the Procedures for Subsidizing Export Credits.
NUMBER OF INTERVENTIONS
Government of Russia. 2017. Об утверждении Правил предоставления из федерального бюджета субсидии акционерному обществу "Российский экспортный центр" на цели субсидирования процентных ставок по экспортным кредитам, предоставляемым коммерческими банками (On approval of the Rules for granting subsidies to the Russian Export Center Joint-Stock Company for the purpose of subsidizing interest rates on export credits provided by commercial banks from the federal budget) N 620 http://pravo.gov.ru/proxy/ips/?docbody=&nd=102433595&rdk=0
On 24 May 2017, the Russian government published the procedures under which commercial banks can issue export-related subsidized loans to the Russian producers.
The Procedures clarify how Russian commercial banks should calculate the amounts to be subsidized by the government and how they should interact with the Russian export promotion agency, which handles the program, oversees its budget and selects participating banks. They also identify a wide range of goods, services and intellectual properties whose exporters qualify for subsidized lending. The subsidies are available, retroactively, to export credits starting 1 January 2017.
According to the Regulations, the commercial banks can issue subsidized credits of up to RUB 7B (USD 124M) with annual interest rates not exceeding 3% for dollar and euro-denominated loans and 4% for ruble-denominated loans. The government will compensate the commercial banks for the difference between the commercial and subsidized interest rate. To compare, Russian central bank financing rate in 2017 was 7.8% - 10.1%.
The program retroactively covers loans issued starting 1 January 2017.
On 16 June 2017, the Government expanded the program (see the related state act).
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. The present government measure makes it easier for Russian firms to compete in export markets.