ANNOUNCEMENT 01 Mar 2014In March 2014, the government of the Russian Federation announced a change to private-sector financial support.
NUMBER OF INTERVENTIONS
On March 1, 2014, the Government of the Russian Federation (according to Resolution 298-p) approved the allocation of subsidies in 2014 for co-financing of interest payments on investment credits, taken from Russian banks and agricultural organisations in order to facilitate the processing and marketing of crop and livestock production. The state support is at the amount of RUB 39.55 billion (ca. USD 1.09 billion).
This state measure is in line with the 2012 statement of the President of the Russian Federation, Mr Vladimir Putin, that the interests of the economic sectors, agriculture included, who meet the most intensive competition from abroad after the WTO accession, will be considered. Furthermore, in the Annual Presidential Address to the Federal Assembly held on 12 December 2013, Mr. Putin declared: "Companies, registered in foreign jurisdictions, must not benefit from state support, including from Vnesheconombank and state guarantees. Their access to contracts for state orders and for contracts with structures with state participation must be eliminated". In conclusion, although the end beneficiaries of the allocated subsidies to the subjects of the Russian Federation cannot be directly identified, it can be expected that they will be Russian.
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.