ANNOUNCEMENT 29 Dec 2014In December 2014, the government of the Russian Federation announced a change in private-sector financial support.
NUMBER OF INTERVENTIONS
On 29 December 2014, Federal law Nr. 467-FZ "On Amendments to the Federal Law "On development of agriculture" expanded the eligibility for state aid to agricultural processors. Only primary producers were eligible prior to the change.
The new legal document stipulates that the interest rates of credits of organisations involved in the processing of agricultural products taken from Russian banks and cooperations till 2021 will be partially reimbursed by the state in the form of subsidies.
There is no explicitly formulated condition that the beneficiaries need to be Russian. However, the implementation can be expected to be in line with an earlier statement of the President of the Russian Federation, Mr Vladimir Putin. In 2012, Mr Putin promised that the interests of the economic sectors who meet the most intensive foreign competition 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 support 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 state subsidies are not explicitly identified as residents and non-residents, it can be expected that they will be Russian.
Federal law Nr. 467-FZ entered into force on 1 January 2015.