(Moscow, 21 October 2013)
On 21 October 2013 the Foreign Investment Advisory Council in Russia held its Twenty-Seventh Plenary Session (hereinafter, the "session"), at which 48 major international companies and banks were represented.
Prime Minister Dmitry Medvedev, Chairman of the Foreign Investment Advisory Council in Russia, spoke at the session.
FIAC members noted that business is currently being conducted against the background of a contracting world economy. Leading international organizations recently lowered their growth forecasts for the world economy: the EBRD lowered its forecast from 3.5% to 1.8%, the World Bank from 2.4% to 2.2%, and the IMF from 3.1% to 2.9%.
In 2013 the growth forecast for the Russian economy remained at a level of 1.8%. Direct foreign investments in January-September 2013 totaled USD 72 billion – more than double the amount in the same period of 2012 (USD 33.8 billion).
The Russian government has made it a priority to stimulate economic growth. This includes improving the investment climate in problem areas of state regulation.
FIAC members have received high marks for their contribution to this effort. Foreign investors took an active part in implementing and monitoring National Business Initiative road maps as well as in assessing the impact of regulatory acts adopted in the Russian Federation and the Customs Union.
The session included a discussion of what FIAC has accomplished in the following areas:
Administrative barriers and technical regulationWork to improve federal legislation on manufacturers' (importers') responsibility for recycling product (consumer packaging) waste, taking into account foreign investors' proposals and recommendations.
In the area of technical regulation:
Harmonization of construction standards with current Western European standards for the design and construction of industrial and other facilities. These joint efforts under the aegis of the Russian Ministry for Regional Development are expected to be completed by the end of 2014.
Improvement of customs law
Implementation of an alternative customs payment system to make this service competitive.The use of ordinary bank cards for customs payments.
Formulation of amendments to the Administrative Offenses Code so that administrative liability will not apply to a declarer or customs representative that voluntarily discloses violations in a customs declaration after goods are released, thus allowing declarations to be adjusted after goods are released without negative consequences for the cross-border operator.
Improvements in electronic declaration technology.
Financial institutions and capital marketsImproving and refining amendments to the chapters of the Russian Civil Code dealing with loans, bank accounts, guarantees and pledges in view of the need for provisions regulating such bank products as syndicated loans, interloan agreements and asset-backed securitization for purposes of further developing the banking sector, lending and pledge law.
Trade and the consumer sectorReforming veterinary law in order to optimize manufacturing systems for regulated veterinary products as well as their importation and transport in countries of the Customs Union.
Harmonization of certain acts of the Russian Government
with the provisions of Federal Law No. 381-FZ of 28 December 2009 “On the Principles of the State Regulation of Trade Activity in the Russian Federation”.
Innovation developmentThe practice of using foreign companies' expertise to identify best available technologies (BAT) and develop state support for innovative eco-friendly forms of electric transport (electric cars) and charging infrastructure in order to create conditions for the subsequent localization of production in Russia.
Enhanced cooperation between FIAC member companies? and Russian institutions of higher education to create favorable conditions for the involvement of foreign companies with a high technological potential and best available technologies in conducting joint research and development and also in implementing innovative developments in production and subsequently commercializing them.
Efficient use of natural resourcesStimulation of capital investments in the development of reserves of natural resources in hard-to-reach areas and on the continental shelf, including by creating attractive and stable working conditions in the natural resource sector of the Russian economy.
Improvement of tax administrationModified VAT treatment of incentive payments (premiums/bonuses) so that bonuses/premiums that do not change the price of goods are directly excluded from VATable turnover.
The practice of making out a single adjustment invoice to adjust the cost of goods shipped (work performed, services rendered) or property rights transferred in two or more invoices made out previously by the same taxpayer.
FIAC will concentrate on the following priority areas in 2014:
In view of these priorities, FIAC members will continue to work with concerned federal executive bodies in these areas in 2014.
The Russian government regards FIAC's efforts as among the most significant and promising areas for harmonizing and strengthening the Russian economy.
FIAC's twenty-eighth plenary session is to be held on the third Monday in October 2014.