(Moscow, 17 October 2011)
The twenty-fifth plenary session of the Foreign Investment Advisory Council in Russia (FIAC) was held in Moscow on 17 October 2011. FIAC unites forty-two chief executives of major world companies and banks.
Speaking at the session, FIAC’s chairman, Russian Prime Minister Vladimir Putin, noted the importance of a productive dialogue between the Russian government and the community of foreign investors in formulating and improving regulatory, fiscal, administrative and other conditions and rules to enhance the investment climate in Russia.
Foreign investors note positive trends in the Russian economy, including those on the macroeconomic level. GDP is expected to grow 4% in 2011, and annual inflation to drop down to a record low level of 7%. A budget deficit is not expected in 2011. Most sectors of the economy are expected to improve their performance, and a higher level of employment is envisaged.
The twenty-fifth session included a discussion of what FIAC working groups have achieved in 2011.
Improvement of customs law
FIAC took active part in drafting a new version of the Federal Law of the Russian Federation “On customs regulation”. As a result, certain customs procedures have been significantly simplified.
Migration law
Progress is noted in the migration policy. The simplified procedure for obtaining visas and work permits for highly qualified foreign specialists became fully effective in 2011. As of now, over 11,000 work permits have been processed according to the new rules. The respective procedure was established based on a federal law regulating engagement of foreign specialists in Russia. This federal law was worked out jointly with FIAC.
Lowering of administrative barriers
Progress has been made in the area of improving administrative procedures related to oversight and control over the safety of consumer goods in Russia and the Customs Union, optimizing control and permit procedures in construction and industrial safety.
Significant results have been achieved in establishing transitional periods for Customs Union technical regulations, increasing liability for violations of technical regulations.
FIAC's experts analyzed and presented conclusions on the regulating impact of over twenty draft regulations on state control. Most comments made by foreign business were taken into account by the Russian Ministry for Economic Development in its official conclusions on the respective draft documents.
Investment appeal of Siberia and the Far East
Progress has been made in the area of improving administrative procedures related to oversight and control over the safety of consumer goods in Russia and the Customs Union, optimizing control and permit procedures in construction and industrial safety. Significant results have been achieved in establishing transitional periods for Customs Union technical regulations, increasing liability for violations of technical regulations. FIAC's experts analyzed and presented conclusions on the regulating impact of over twenty draft regulations on state control. Most comments made by foreign business were taken into account by the Russian Ministry for Economic Development in its official conclusions on the respective draft documents.
Investment appeal of Siberia and the Far East
In 2011, a collected paper "Achievements of foreign investors in the Far East and Siberia" was issued. FIAC placed a video “Investment opportunities in the Far East and in Eastern Siberia” on its website. A list of investment projects in the Far East and Siberia was prepared and distributed to potential investors and regional administrations. FIAC organized presentations by representatives of the administrations of several constituent entities of the Russian Federation about their regional investment advantages and investment appeal.
Liberalization of legislation on foreign investments in strategic sectors of the Russian economy
Jointly with FIAC, amendments were drafted to Federal Law No. 57-FZ “On the procedure of foreign investments in business entities which are of strategic importance for national defense and state security”. Pursuant to the amendments, no agreement procedures are required for transactions involving the World Bank and the European Bank for Reconstruction and Development, as well as transactions between entities controlled by Russian citizens. Besides, the threshold for interest purchased in an asset related to subsoil use which requires special permission has been raised from 10% to 25%.
Consideration of investors' complaints
It is noted that the office of the ombudsman is successfully functioning to protect the interests of foreign investors. Over the past year, the ombudsman has received 78 complaints from foreign investors. Of them, 55 have already been settled positively. Most complaints concerned issues relating to administrative barriers, abuse of power by public authorities, and customs procedures. The work of the ombudsman has been recognized as efficient.
It is considered expedient to continue efforts in this area.
FIAC’s priorities for 2012 are:
FIAC’s members wish to point out that the results of FIAC’s work in the new format confirm that a deeper understanding has been reached between the Russian government and the community of foreign investors.