ANNOUNCEMENT 10 Oct 2019

On 10 October 2019, the Russian president approved amendments into the Budget Code that allow (export-bound) alcohol production to be subsidized by the state. 

NUMBER OF INTERVENTIONS

1

  • 1 harmful
  • 0 neutral
  • 0 liberalising

SOURCE

Federal Law N330-ФЗ dated 01.10.2019, О внесении изменения в статью 78 Бюджетного кодекса Российской Федерации (On Amendments to the Article 78 of the Budget Code of the Russian Federation), http://www.consultant.ru/document/cons_doc_LAW_334458/3d0cac60971a511280cbba229d9b6329c07731f7/#dst100009
Background from the Russian business-daily Vedomosti: https://www.vedomosti.ru/business/articles/2019/10/01/812580-eksport-vodki

Inception date: 01 Jan 2020 | Removal date: open ended

Export subsidy

On 10 October 2019, the Russian president approved amendments into the Budget Code that allow (export-bound) alcohol production to be subsidized by the state. Prior to amendments, the state budget could not be used to subsidize goods subject to an excise tax (alcohol included). 

The amendments explicitly state that only export-bound alcohol production is exempted from the prohibition on subsidizing the production of goods subject to excise tax. 

The representative of the Russian agriculture ministry commented to the Russian business daily Vedomosti that the existing instrument of subsidization is interest payment subsidies on corporate loans. Business analysts that the newspaper interviewed stated that beer and vodka are the primary Russian exports. 

The amendments enter into force on 1 January 2020, after which the Russian vodka, beer and other alcohol producers, will be able to, like the winemakers, to benefit, for example from the program of interest payment subsidies to agricultural producers and processors that the Russian government makes available under the Development of Agriculture state program. Under the scheme, operationalised in November 2016, the government paid out at least USD 630 in 2019 and USD 84 million in 2018 (see related state acts). 
 

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