Anti-corruption and combating bribery of foreign public officials measures

Anti-corruption measures

Combating bribery of foreign public officials measures

Russia Country Report Apr18 – April, 2018

Following weaker performance at the end of last year, the Russian economy appeared to get back to the track of slow growth in the first two months of this year. The engine of recovery seems to have shifted from last year’s primary production to a broader base, but the development is still shaky.

Retail sales rose by 2% y/y in January-February. This represented a slight slowdown from the end of last year, even if real wages rose by over 10% y/y. The spurt appears to have come largely from certain public sector wage hikes prescribed by president Putin back in 2012 released ahead of the presidential elections on March 18. Notably public sector wage hikes were limited and one-offs so they will not support consumption this year, usually a major economic driver.

Real incomes, however, still contracted by nearly 1% y/y, although the last year’s point of reference is raised by the RUB5,000 one-time pay-outs to most pensioners (if the pay-out is ignored, real incomes rose by 2.5% y/y).

In 2017, household consumption was an important driver of economic growth. Sberbank analysts expect it to continue growing 1-2 pp faster than GDP in the coming years, driven by a recovery in real disposable income and a reduction in inequality.

In contrast, growth in industrial output accelerated in the first two months of the year, mainly thanks to support from manufacturing.

Manufacturing recovered briskly in January-February, rising 3% y/y. Metal fabrication and the car industry were among the main growth drivers. Growth in output of extractive industries slowed to under 1%, with oil & gas production levels declining from a year earlier. Pipeline transmission volumes also fell, weighing on growth of the entire transport sector. Construction activity remained unchanged from a year earlier in January-February, mainly on strong growth in housing construction. And the outlook for agriculture is good. While Russia is unlikely to beat last year’s all time high record harvest result, it will probably bring in a big harvest above trend and should earn at least $20bn from grain exports again.

Politics remain fraught. At the end of March nearly 30 countries followed the UK in expelling over 100 Russian diplomats from their countries. Many countries assess Russia to be responsible for the nerve agent attack in England in early March. While the coordinated expulsion of diplomats sent a powerful political signal, Russian market reactions were limited. The ruble-dollar rate depreciated by 0.4% in the beginning of this week and the Moscow exchange’s RTS index fell by about 1%. In the same week as the expulsions were announced Russia raised $3.75bn on London’s capital market and German gave full construction permits to the Nord Stream II gas pipeline.

President Putin’s speech unveiled a very ambitious plan reform plan during his state of the nation speech on March 1. The President wants productivity growth to accelerate to 5% per year (since 2009, the average growth was only 1%) during next decade, the share of SMEs in GDP to go up to 40% (from current level of 20%), the number of people employed in SMEs to go up from 19mn to 25mn people, and to halve the number of people living below the poverty line (currently 13.8% of the population or 20mn people).

This growth is planned to be supported by a decline in interest rates, including a decrease in mortgage rates to 7% (9.9% in January 2018), increased cabinet spending on healthcare (up to 4-5% GDP per year vs. current 3% GDP) and education spending. The Central Bank cut rates again to 7.25% and is expected to cut at least once more this year, although some economists say the end of year interest rates could fall to 6% this year as the regulator is starting to switch its focus from inflation to growth.

How all Putin’s ambitious spending plans will be funded, remains a question to the government has yet to elaborate on. But, it is quite clear from the speech that stronger growth indicators are expected to generate enough budget revenues to enable continued defense spending. Also it is becoming clear there will be a major shuffle of social benefit payments, a raising of retirement ages and probably increases in taxes after Putin is inaugurated in May. A big government reshuffle, including a change in prime minister, is widely expected in the second quarter.

The CBR expects 1.5-1.8% y/y GDP growth in the first quarter of 2018, with 1.5-2.0% y/y growth for the full year. Some economists are predicting surprises on the upside to growth: Goldman Sachs is predicting 3.3% growth this year. To reach Putin’s call for a 50% expansion in the size of the economy over six years Russia’s economy would have to grow by 6% or more a year, which is highly unlikely.

The main driver is expected to be consumption growth supported by continuing salary and retail lending growth. While bankers share the view that consumption looks to the main driving force of the growth, Alfa Bank has a different view on the scale and seasonality of this year’s recovery.

Natalia Orlova, chief economist at Alfa Bank expects stronger growth in the first half, reflecting the finalization of state investment projects. Alfa also believe the recovery in consumption should have a positive effect on producers and inventories. However, entering the second half of 2018 Orlova expects retail lending growth to trigger inflationary concerns, as a result of, which the CBR will be forced to implement tighter regulation, which would cool the economic sentiment.

The cabinet is expected to focus on better tax collection, which would put a strong ceiling on the growth recovery. As a result, Alfa has a modest expectation of only 1.0% y/y GDP growth this year, which is below the official forecasts.

Resource: http://www.intellinews.com

Exhibition VIETNAM-EXPO-SIBERIA, 28-30 May 2018

The exhibition VIETNAM-EXPO-SIBERIA will take place in Novosibirsk Expo Centre on 28-30 of May 2018.
This event is a meeting place for suppliers, buyers, specialists, decision-makers, consultants, representatives of state structures and mass media of Russia and Vietnam.

Main goals of the exhibition:
– Creating of conditions for the development of trade relations between the Siberian Federal District and the Socialist Republic of Vietnam;
– Increase in trade turnover between countries;
– Introduction of the most perspective developments and economic instruments necessary for the stable growth of various industries of the two countries.

Official website: http://vietexposib.com/
Facebook: https://www.facebook.com/events/1710511435639578/

Russia moves five places in WEF’s Global Competitiveness Report

image_31Russia was ranked 38th among the 138 countries surveyed in the World Economic Forum’s Global Competitiveness Report published on September 26, moving up five places and “rebounding strongly from the 2015–16 recession”. This made a faster advance than moving up by only 2 places in 2016.
In a separate ranking, for the World Bank’s Doing Business 2016 report, President Vladimir Putin has set a target for Russia to be in the top 20 best countries to do business in by 2018. When Putin set this goal Russia was ranked 121 but in last year’s ranking in 2016 it narrowly missed taking the 51st slot among 189 countries after climbing 11 places in the previous year.
The latest Global Competitiveness Report notes that despite the progress, Russia’s economy remains highly dependent on mineral exports and its prospects remain uncertain.
The weak links in Russian economy include the financial market (ranked 107th), in particular the banking sector, the report said, joining Fitch Ratings and Standard & Poor’s in their concerns over banking stability and the cost of the ongoing banking sector clean-up.
Other weak categories include aspects of institutional quality such as property rights (106th), judicial independence (90th), and corruption, which remains one of the most problematic factors for doing business.
“Russia has passed new laws to increase the minimum wage (2015) and protect temporary employment (2016), which have lowered labor market flexibility (75th, down 18 places),” the report also notes, while admitting that this “may have a beneficial overall effect by restoring domestic purchasing power.
Compared to last year’s survey, the macroeconomic environment improved the most (50th position), with Russia traditionally scoring strongly in market size (6th place), higher education and training (32nd), and infrastructure (35th).
Another international rating, the 2017 Economic Freedom Index compiled by the Heritage Foundation in February, placed Russia at the 114th position in the ‘Mostly Unfree’ category (countries from 93rd to 157th rank) with a score of 57.1 of 100.
Although compared with last year’s survey Russia’s score gained 6.5pp, the report by the conservative US think tank commented that the country’s economy is “severely hampered by blatant disdain for the rule of law and for the concept of limited government”.

Resource: http://www.intellinews.com/russia-moves-five-places-in-wef-s-global-competitiveness-report-129633/?source=russia

Forum Eurasian Week 2017

image002 The Eurasian Week is a major annual business event aimed at the development of economy, investment and export potential of the Eurasian Economic Union (EAEU). The forum is held by the EAEU and the Eurasian Economic Commission.

The initiative to hold the annual Eurasian Week forum was approved by the prime ministers of five EAEU countries in May 2015.
The aim of the Eurasian Week is to offer opportunities for the development of export and investment potential of EAEU member-countries.

Main missions of the forum:

  • Inform business community of the EAEU and third countries about the main achievements and strategic guidelines of the Union, as well as business support and development mechanisms.
  • Enhance business interaction both within the Union and outside it: encourage B2B and G2B meetings and develop cooperation and subcontracted projects.
  • Engage business community in the solution of specific Eurasian integration issues.

The forum is to offer an efficient dialogue platform for businessmen, experts and authorities of EAEU and third countries to discuss vital and specific issues of economic development in conditions of global challenges and jointly draft strategic solutions.

Eurasian Week-2016

  • The first Eurasian Week was held in October 2016 on the sidelines of the International Moscow Forum and Open Innovations development show.
  • The business program included 16 thematic workshops with the participation of business and expert circles of Union member-states and third countries (Vietnam, Singapore, Egypt, South Korea, and EU countries). There were over 400 speakers.
  • The exhibition part of the forum involved 43 exhibitors from Union countries and launched B2B interaction. Over 2000 people visited the forum. The forum was attended by more than 2,000 persons in total.

Eurasian Week-2017

  • This year the Eurasian Week will be held on the sidelines of EXPO-2017.
  • The forum is listed among 18 most significant events of EXPO-2017.
  • The main topics of the business program include Competitiveness in Modern Economic Conditions: Points of Growth (first day); Freedom of Goods, Services, Capital, Manpower and Information Movement in the EAEU: Present and Future (second day); Economy of the Future: Strategic Business Development Guidelines (third day).

All business program guidelines and the exhibition part of the forum are united under a common EAEU Export Potential Development motto.

Within the framework of the Eurasian Week, the Union Member States will showcase their export opportunities. The interactive exposition will bring together more than 300 companies of the Union Member States with an export potential.

The main areas of the exhibition include energy, IT and telecoms, agriculture, food industry, transport and logistics, engineering and automotive industry, chemicals, petrochemicals, pharmaceuticals and medical devices, metallurgy, mining, light industry, and wood processing.

The participants of the Forum will be able to invite any of the exhibitors for a bilateral meeting right at the Forum site by using an online appointment system.

Download Eurasian Week Forum programme.

For more information and registration please visit www.eurasianweek.org

Contact information:
Registration of Participants
Konstantin Fedulkin
participant@eurasianweek.com

Contacts with Speakers
Svetlana Platonova
speaker@eurasianweek.com

Media Accreditation
Nikolay Evdokimov
press@eurasianweek.com

Flights and Accommodation
Elgina Valiieva
valieva@corptravel.ru

General Inquiries
+7 (495) 320-81-40

IQ-CHem: International Projects Contest

Screenshot_49IQ-CHem is an international contest of innovative projects in the field of chemistry and new materials.

SIBUR Holding established the IQ-CHem contest in 2010. As of today, SIBUR is Russia’s largest integrated gas processing and petrochemical company. More than 1,000 projects have been submitted by aspirants within the five-year history of the contest. IQ-CHem acquired a new open format in 2016 to attract leading chemical corporations and venture funds seeking opportunities of cooperation with promising startups.

Download full SIBUR IQ-CHEM Contest presentation.

Contact Information:
Ekaterina Romanyuk
RomanyukES@sibur.ru
+7 (495) 777-55-00 (*28-66)
www.iq-chem.com

Russian-British Business Forum «Partnerships for growth. New strategies»

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sponsors32

Sberbank IDS www.iceland.co.uk www.aeroflot.com www.pinsentmasons.com www.dell.com www.yiangou.com.cy

30 November – The Russian-British Business Forum
Venue: The Queen Elizabeth II Conference Centre, Broad Sanctuary, Westminster, London SW1P 3EE

The Russian Trade Delegation together with partners in the UK and Russia organizes the second Russian-British Business Forum 2016 «Partnerships for growth. New Strategies». The Forum will be held on November 29-30 in London to discuss challenges and opportunities for bilateral trade and economic cooperation between the two countries.

The Forum 2016 brings together key segments of the UK and Russia economy for productive dialogue on future growth. The co-organizers are the Ministry of Economic Development of the Russian Federation, the partners: The Embassy of Russia in the UK, Russo-British Chamber of Commerce, Agency for Strategic Initiatives (Russia), Skolkovo Foundation (Russia).

200 attendees and 50 spokespeople from the UK and Russia will attend, representing a wide range of industries and interests at governmental and corporate level. The participants are organizations from the financial services, IT Sector, 2018 FIFA World Cup Russia, Professional Services, Energy, Oil and Gas, Mining and Natural Resources, Life Sciences and the Health Sector, Food and FMCG, Retail.

The Forum is focused on prospects for cooperation between Russian and British companies and trends in support of businesses and provides the following benefits for attendees:

  • Opportunity to hear about the latest business opportunities in Russia, challenges and success stories;
  • Meeting high level government officials and representatives of financial institutions, Russian regions and companies from Russia and the UK;
  • Networking opportunity – including pre-arranged Government-to-Business and Business-to-Business meetings during a dedicated One-on-one networking event;
  • Advice from UK International Trade Advisers and Business Specialists on export-import operations and doing business with Russia.

29 November – Evening reception at the Trade Delegation of the Russian Federation in the United Kingdom (Russian Trade Delegation in the United Kingdom, 32-33 Highgate West Hill, London, N6 6NL);

30 November – The Russian-British Business Forum, Panel Discussions and B2B/B2G session meetings (Business meetings and negotiations between Russian and British companies for discussion of business opportunities, deals and projects (booked in advance)) (The Queen Elizabeth II Conference Centre, Broad Sanctuary, Westminster, London SW1P 3EE)

 

Download Russian-British Business Forum programme.

Download Russian-British Business Forum presentation.

 
 

Saint-Petersburg International Mercantile Exchange

SPIMEXlogoThe Federal Government’s decision to launch a modern exchange platform is aimed at establishing a regulated commodity market in Russia in conjunction with providing fair market indicators for the most important commodities, and to further promote market pricing principles.
In May 2008, the Joint Stock Company Saint-Petersburg International Mercantile Exchange was registered, and a month later, in June 2008, it received a licence from the Federal Service for Financial Markets to launch exchange trading (licence No.153 as of June 5, 2008).
September 23, 2008 saw the first trades in diesel and jet fuel on the Exchange’s Petroleum Products Section.
Today, the Saint-Petersburg International Mercantile Exchange (or SPIMEX) is the largest commodity exchange in Russia.
SPIMEX harnesses cutting-edge software solutions to offer a convenient, reliable and transparent trading experience. The SPIMEX Electronic Trading System gives buyers and sellers easy-to-use, remote online access to all the Exchange’s markets and services. Modern risk management and settlement procedures, developed in line with international standards, ensure financial oversight over contract execution and physical delivery.
SPIMEX offers trading both in spot and derivatives contracts.
SPIMEX makes spot trading available for the main categories of petroleum products, operating a wide-ranging network of delivery points and enforcing common rules and procedures for all stakeholders.
SPIMEX registers futures contracts for summer diesel fuel, with delivery ex works from the oil refineries located within the Central Federal District.
On October 19, 2012 SPIMEX opened trading for non-deliverable futures contracts that are used in calculating the Exchange’s indices for the underlying petroleum products – summer diesel, gasoline, fuel oil and jet fuel. The Exchange is working to expand the number of delivery points and offer new deliverable and non-deliverable contracts for the main categories of petroleum products and other commodities.
SPIMEX processes the data of contracts closed on the trading floor to calculate and publish the values of indices for the full range of petroleum products on a daily basis, including: Gasoline Regular 92, Gasoline Premium 95; Summer Diesel, Autumn/Spring Diesel; Winter Diesel; Jet Fuel; and Fuel Oil.
SPIMEX also registers OTC contracts closed on Russia’s domestic market. The information on OTC prices for the main categories of petroleum products is publicly available on the Exchange’s website and includes aggregate data on nine main commodity groups: Gasoline Normal 80, Gasoline Regular 92, Gasoline Premium 95, Autumn/Spring Diesel; Winter Diesel, Summer Diesel, Fuel Oil, Jet Fuel; and Low-Viscosity Marine Fuel.
SPIMEX has played a key role in establishing nationally accepted indicators and developing a commodities futures marketplace, where producers and consumers can effectively hedge against price risks and execute their long-term operational and sales strategies. Shaped at the liquid and transparent exchange, SPIMEX quotes comply with the definition of a fair market price set forth in the tax, antitrust and exchange laws and regulations.

pdf

Download Saint-Petersburg International Mercantile Exchange presentation.

 

Contact Information:
SC Saint Petersburg International Mercantile Exchange
Address: Moscow, Timura Frunze str., 24
Tel.: +7 (495) 380-04-24
E-mail: clients@spimex.com
Web-Site: www.spimex.com

CIS LONDON & PARTNERS LLP provides pro bono legal advice to the Russian Trade Delegation in the UK.

CISlondonCIS LONDON & PARTNERS LLP provides pro bono legal advice to the Russian Trade Delegation in the UK.

CIS LONDON & PARTNERS LLP is headquartered in London advising corporate and private clients on all key aspects of Russian law. The team of Russian lawyers specialises in M&A deals, joint ventures and other cross-border transactions with a Russian element. The Legal 500 has recognised CIS LONDON & PARTNERS LLP as a Tier 1 Foreign Law Firm in London for Russia.

Svetlana London – Managing Partner of CIS LONDON & PARTNERS LLP:
Our company provides pro bono support to the Trade Delegation of the Russian Federation in the UK and would be happy to provide a discount for legal advice on Russian law for UK businesses refereed through the Trade Delegation.

For more information please visit CIS LONDON & PARTNERS LLP website.

List of agricultural and food products prohibited for importation into Russia

On August 7, 2014 the Russian Government issued its Resolution in execution of Russian President’s Decree No. 560 of August 6, 2014, establishing the list of agricultural and food products prohibited for importation into Russia, if the jurisdiction of origin of which is the EU, US, Canada, Australia or Norway (i.e. those that have imposed Ukraine-related economic sanctions against Russian citizens and companies). The Resolution comes into force starting from the date of its official publication (the date is still unknown, but should likely follow soon) and will be effective for one year.
Please see the list below of banned products and their HS codes:

HS Code Product’s name*,***
0201 meat of bovine animals, fresh or chilled;
0202 meat of bovine animals, frozen
0203 meat of swine, fresh, chilled of frozen;
0207 meat and edible offal of the poultry mentioned in heading 0105, fresh, chilled or frozen;
from 0210** meat (salted, in brine, dried or smoked)
0301, 0302, 0303, 0304, 0305, 0306, 0307, 0308 fish and crustaceans, molluscs and other aquatic invertebrates;
0401, 0402, 0403, 0404, 0405, 0406 milk and dairy produce;
0701, 0702 00 000, 0703, 0704, 0705, 0706, 0707 00, 0708, 0709, 0710, 0711, 0712, 0713, 0714 edible vegetables and certain roots and tubers;
0801, 0802, 0803, 0804, 0805, 0806, 0807, 0808, 0809, 0810, 0811, 0813 fruit and nuts;
1601 00 sausages and similar products, of meat, meat offal or blood; food preparations based on these products;
1901 90 110 0,
1901 90 910 0,
Prepared foodstuffs, including cheese and curb based on vegetable oil;
2106 90 920 0,
2106 90 980 4,
2106 90 980 5,
2106 90 980 9
Foodstuffs (containing milk, based on vegetable oils).

Notes:
* – for the purposes of this list please refer to the Customs Classification (HS) Codes of the Customs Union only, the verbal names of the products are given merely for convenience;
** – for the purposes of this position please refer to the Customs Classification (HS) Codes of the Customs Union as well as to the product’s name;
*** – except baby food