The Russian Export Center (REC) will submit the proposals suggested by businessmen on measures to support exports to the government following the results of the strategic session, Director General of REC Andrey Slepnev told TASS during the session with Russian exporters on issues of developing the second package of regulatory measures to support exports on Tuesday.
“Following the results of the session, we will collect all proposals, they will be worked out by an official working group set up as part of the National Project ‘International cooperation and export’ and submitted to the government’s project committee,” he said.
According to Slepnev, the government will consider the proposed roadmap for further implementation by October 1, 2019.
At the end of the session, each group summed up two key sectoral measures capable of notably boosting export activities of the Russian business on particular markets. Particularly, representatives of the consumer goods industry noted the importance of reducing counterfeit supplies, the players of the pharmaceuticals market mentioned decriminalization of failed repatriation of revenues as one of the most relevant measures.
Deputy Finance Minister Ilya Trunin urged the participants at the beginning of the session to be realistic in assessing the prospects of decision-making, for example, regarding forex control liberalization. “It is clear that we all want to abolish foreign exchange control, criminal liability. That is the main idea of Russia’s Finance Ministry, which we are actively addressing. However, obviously, we will hardly manage to do it entirely in the near future, unfortunately,” he said. “That is why it is worth working at the most sensitive elements of the existing regulation and focus on their reforming. That concerns not only forex control, but also customs and tax administration,” Trunin added.
Moreover, all sectors voted for three most important systemic measures. In descending order of priority, they were the lowering of logistic expenditures, subsidies’ scaling, online registration of export licenses, the development of export transport-logistics infrastructure (turnover capacity, wholesale distribution centers).
Official secretary of REC Maxim Chemerisov emphasized that all measures of systemic and sectoral nature voiced at the session would be thoroughly processed, while a sector-wide digest would be published on REC’s website. “The data that we have gathered as of today enables us not only to form the second package of regulatory measures, but also to carry out an important renovation of the roadmap of the industry-specific regulation, to further adjust subsidiary mechanisms, certain milestones of the National Project may be specified if necessary,” he concluded.
Businessmen’s proposals to support exports approved by the government are planned to be included in the second package of regulatory measures.
The Russian authorities together with REC, which is part of VEB.RF, and the business community have hammered out and are now launching the so-called first regulatory package of measures aimed at developing exports.
According to Slepnev, the first regulatory package was focused on the issues that were most urgent for the business. Particularly, it contains cancellation of obligations on return of exporters’ ruble revenues, as well as liberalization of return of foreign currency revenues – for instance, for companies under sanctions it is suggested to increase the timescale, on which currency returns are to be ensured.
Moreover, it is planned to slash penalties for the untimely revenue return from the current 100% to 3-5 %.
Current state of affairs
Amid the government’s activities on boosting the share of non-resource exports, efforts have been stepped up to lift financial and administrative restrictions. Companies mention an over-demanding administrative policy (particularly connected with forex control) among the main factors retaining exports. REC and the Finance Ministry have been working at loosening forex control for exporters since last year. An array of changes in this respect have already been adopted, others are being addressed.
Now exporters are obliged to transfer revenues both in rubles and in foreign currency to their accounts in Russian banks. The company is fined for each overdue day, while the fine for failed revenue return may total 75-100% of the transaction amount. Under the law in force, failed repatriation of revenues on a massive scale stipulates imprisonment for the period up to five years.