ANNOUNCEMENT 14 Mar 2015In March 2015, the government of the Russian Federation announced a change in private-sector financial support.
NUMBER OF INTERVENTIONS
In early 2015, the federal government of Russia transferred additional funds to its regions in order to help support newly founded agricultural producers.
On 14 March 2015 was signed Order Nr. 436. Its purpose is to allocate from the state budget subsidies at the total amount of 1 900 000 000 RUB (ca. 30 571 346 USD) to selected subjects of the Russian Federation (the constituent entities or the top-level political divisions according to the Constitution of Russia).
The concrete purpose of the budget allocation is to co-finance in 2015 the expenditures of selected subjects of the Russian Federation with regard to the financial grants they allocate for the support of farming start-ups and development of existing farms.
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, that 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.