Joint Statement of the UK and Russian Co-Chairs of the Intergovernmental Steering Committee on Trade and Investment

The 9th session of the Russian-British Intergovernmental Steering Committee on Trade and Investment (ISC) was held in London on 29 October 2012. The Russian delegation was headed by First Deputy Prime Minister Mr Igor Shuvalov, the British delegation by Secretary of State for Business, Innovation and Skills Dr Vince Cable MP.

 Representatives of Russian and British businesses, led by Alexander Shokhin for the Russian Union of Industrialists and Entrepreneurs (RSPP) and by John Cridland for the Confederation of British Industry (CBI) took part in the open session of ISC. The ISC provided a forum for Government and businesses to discuss the trade and commercial relationship between Russia and the UK in key areas and frameworks specified during the meeting of Russian President Vladimir Putin and British Prime Minister David Cameron in August, as well as in the context of the Declaration on a Knowledge-Based Partnership for Modernisation between the Russian Federation and the United Kingdom of Great Britain and Northern Ireland in order to promote dialogue and opportunities, raise issues and tackle barriers to business.

 At a time of considerable global economic uncertainty, the Co-Chairs reaffirmed the importance of expanding and deepening the current trade relationship between the two countries. They welcomed Russia’s accession to the WTO as an important achievement that is good for both countries in the promotion of open markets for trade and investments; accession will help ensure fair treatment for Russia’s exports, easier access to international markets and see an increase in foreign investment, including from UK investors. It is an opportunity to build on the complementary strengths in the already strong bilateral trade relationship. Russia and the UK will work closely together through the WTO and other fora to help improve the business climate to encourage domestic and foreign investment and innovation.

 The sides confirmed that development of bilateral economic and trade cooperation and market openness are necessary conditions for maintaining the recovery of both countries’ economic potential.

 The sides expressed their willingness to continue exchanging information on measures taken by governments of Russia and the UK to stimulate economic growth.

 The sides also welcome the progress Russia has made towards accession to the Organization for Economic Cooperation and Development.

 The Co-Chairs celebrated the success of the London 2012 Olympic Games and looked forward to further developing the cooperation between the UK and Russia ahead of the 2014 Sochi Winter Olympic Games and the 2018 Football World Cup. Close cooperation is already underway with more than 50 UK companies already doing business in Sochi. The Co-Chairs also welcomed the UK-Russia 2014 Year of Culture as an exciting prospect for the recognition of cultural ties and people-to-people links.

 The Co-chairs discussed how air links should assist the development of  trade and tourism links and agreed to explore the possibility of  increasing the number of direct flights between the two countries. The co-chairs noted the progress made on resolving the issue of access of British beef and lamb to the Russian market and believed that information provided by the UK CVO in the last few days would mean that the issue could be satisfactorily resolved in the near future.  Progress was also welcomed on the issue of providing protection to the geographical indicator “Scotch Whisky” in Russia. The UK side noted that they share the European Union’s concerns about the situation with Siberian overflight charges and Russia’s recently introduced Vehicle Recycling Fee. The two sides considered how to improve visa procedures for the benefit of travellers in both directions.

 The sides welcomed the signing of the Memorandum of Cooperation between “EXIAR” and «UK Export Finance» and cooperation in the field of risk assessment.

 The sides noted and welcomed the active role of “RDIF” (Russian Direct Investment Fund) aimed at strengthening and developing relationship and connections with the British business community.

 The sides will consider the scope for further collaboration on Housing and Territorial Development.

 The Deputy Co-chairs reported to the ISC on the achievements of key work sectors since the last meeting of the ISC in November 2010. Recognising these achievements, the Co-Chairs agreed to refresh the existing programme of work under the ISC. In some areas, already established work streams will continue and in some other areas of joint priority new work streams will be established. Workstreams’ leads from Russia and the UK will work together as contact points establishing work programmes for the coming year that will foster closer business to business co-operation.

 Looking forward to 2013, the Committee approved cooperation in the following Workstreams:

 Financial Services

  • The Co-Chairs agreed that the Financial Services workstream had made good progress by signing of a Memorandum of Understanding between TheCityUK and Vnesheconombank (VEB) during the UK Prime Minister’s visit to Moscow in September 2011 and the establishment of the Joint Liaison Group on developing Moscow as an International Financial Centre and should continue in its present form.
  • The UK reiterated its support for Russia’s ambitions of developing Moscow as an international financial centre. Both sides looked forward to the forthcoming meeting of the Joint Liaison Group in December.

 

High Technology Industries

  • Co-Chairs agreed that this workstream will complement the work of the Joint Commission on Science and Innovation by promoting opportunities for collaboration on commercial projects involving advanced technologies, such as with the Skolkovo Innovation hub, the Rusnano organisation and Russia’s Direct Investment Fund. Contact will be encouraged with UK parties including organisations such as Tech City.
  • The sides intend to develop and support the implementation of the joint Russian-British investment projects in industries with high technological potential.

 

Small and Medium Sized Enterprises

  • Workstream will comprise two elements henceforward. The first will continue to focus on Government to Government exchange of expertise on support for SME’s.
  • For the second element both Sides will work with business associations to help UK and Russian SME’s secure business in the respective markets. The UK Side are planning a joint government and business visit by Medium-Sized businesses in late November to be led by Trade and Investment Minister, Lord Green.

 

Transport Infrastructure

  • This workstream will build on the Memorandum of Understanding signed between UKTI and Russian Railways to develop business to business links, share UK experience and stimulate UK investment in the Russian railway sector.

 

Business Environment

  • Both Sides agreed to work towards the removal of government imposed obstacles to growth, ensuring clear consistent rules to govern business, supporting efforts to improve the business climate, engaging in a constructive debate with the business community and offering them a mechanism to raise their concerns.

 

Sports cooperation

  • Both sides agreed to share the UK’s practical experience and commercial expertise to support Russia’s hosting of major international sporting events over the coming years, including the 2014 Sochi Winter Olympics and FIFA 2018 World Cup.
  • In order to further cooperation, the sides will consider the possibility of signing an interagency Memorandum of Understanding in the field of physical culture and sport.

 

Energy  including nuclear energy and energy efficiency

  • The Sides valued highly bilateral cooperation in energy sector, paying particular attention to energy efficiency, energy saving and renewable energy issues. The parties agreed that it will be more effective to develop collaboration between the Department of Energy and Climate Change of the UK (DECC) and Ministry of Energy of the Russian Federation through the Russian-British Energy Dialogue.
  • The sides noted the fruitful work in the framework of the Memorandum of Understanding between the State Corporation “Rosatom” and the company Rolls-Royce signed on 12 September 2011, and also welcome the expansion of cooperation in the peaceful uses of nuclear energy.In order to develop such cooperation the Sides reiterated the importance of cooperation between the UK’s Department for Energy and Climate Change (DECC) and the State Corporation “Rosatom”.

 

Finally, the Co-Chairs announced that the Deputy Co-Chairs for 2013 will undertake a review of progress in key areas of cooperation and looked forward to resuming a full ISC session in Moscow in 2013, noting the priority of taking concrete steps to implement the Declaration on a Knowledge-Based Partnership for Modernisation between the Russian Federation and the United Kingdom of Great Britain and Northern Ireland.

First Deputy Prime Minister of the Russian federation, Russian Co-Chair of the Intergovernmental Steering Committee on Trade and Investment
I.Shuvalov

Secretary of State for Business, Innovation and Skills, UK Co-Chair of the Intergovernmental Steering Committee on Trade and Investment
V.Cable

VII Session 2009

RUSSIA – UK INTERGOVERNMENTAL STEERING COMMITTEE ON TRADE AND INVESTMENT
5 November 2009, London

Joint Statement

1. The 2009 meeting of the Russia- UK Intergovernmental Steering Committee on Trade and Investment (ISC) was held in London on 5 November. The event was co-chaired by Lord Mandelson, First Secretary of State and Secretary of State for Business Innovation and Skills, for the United Kingdom and Alexey Kudrin, Deputy Prime Minister and Finance Minister, for the Russian Federation. The Committee supported the continuation of the ISC as a constructive forum for addressing the issues most pressing to the respective business communities. It welcomed the high-level dialogue and progress to date since the previous sides in Moscow in 2008.

2. Both sides committed to further strengthening bilateral trade, investment and economic relations, already functioning at a high level. They shared their experiences of supporting the economy during the global financial crisis and plans to stimulate recovery. They recognised the important role of both government and business in strengthening these relations. The Committee discussed progress in the six key areas already identified in which co-operation between the business communities could significantly improve bilateral trade and investment prospects.
These were:

Financial services
Business environment
Small and medium enterprises (SMEs)
Energy and energy efficiency
High-tech industry, including nano-technology
Olympic legacy

Financial Services

3. The UK and Russia have a long-established and successful financial services relationship. The UK is consistently among the top five largest investors in Russia. Prior to the crisis, Russian companies accounted for the single largest share of IPOs on the London Stock Exchange. Developing this relationship is vital for business success.

4. The UK reiterated its support for Russia’s ambitions of developing Moscow as an international financial centre. The UK congratulated Russia on its successful International Investment event held in London in parallel with the ISC meeting.

5. Both sides commended the strong relationship between the Bank of England and the Central Bank of Russia, bolstered by the joint seminars and conferences. The Committee welcomed the Memorandum of Understanding between Partnerships UK and VneshEconomBank, allowing constructive co-operation in the field of public-private partnerships.

Business Environment

6. Both governments support efforts to improve their respective business climate, engaging in a constructive debate with the business communities. The Committee acknowledged the need to improve market access; the legislative and regulatory environment affecting investors and business generally; and Customs and visa operations. The Committee reaffirmed support for the commitments of the G20 Summits to guard against protectionism in trade.

SMEs

7. During a period of critical transition from crisis to recovery, the Committee recognised the importance of supporting SMEs, a vital segment of business for the sustainable development of both economies. There was particular focus on how the regions in both countries could benefit from the development of policies supportive of new SMEs and that reduction of the administrative burden on existing SMEs was important in encouraging the diversification of Russia’s developing manufacturing sector through innovation. The UK side offered some insight into how tailoring particular mechanisms, such as taxation, could offer the best support to SMEs. The Russian side drew attention to their recently allocated funds for investment in SMEs

Energy and Energy Efficiency

8. As a direct result of the last ISC meeting, the Confederation of British Industries (CBI) and the RSPP (Russian Union of Entrepreneurs and Industrialists) have forged a strong partnership to promote to their membership and governments, the business as well as environmental benefits of energy efficiency.

9. As a signal of commitment to supporting implementation of energy efficiency measures, the UK’s Secretary of State for Energy and Climate Change and the Russian Minister of Energy signed a Memorandum of Understanding on Energy Efficiency and Renewable Energy in October 2009. This MoU will complement and support work in the sector including that led by CBI and RSPP.

10. The UK and Russian nuclear industry bodies will explore ways in which the two industries can co-operate in civil nuclear matters.

High-Tech Industry

11. The Committee supported enhanced co-operation in high technology industries. The Committee welcomed the visit of Russia’s hi-tech-focused corporation, RusNano, to explore several possible joint ventures with UK companies, following a successful visit to the UK’s Science Institute at Begbroke Park earlier this year. The Committee looked forward to the subsequent visit to the UK by the head of RusNano later in 2009.

Olympic Legacy

12. The UK will host the London 2012 Olympic and Paralympic Games. Russia will host the Sochi 2014 Winter Olympic and Paralympic Games. The Committee were encouraged by the good working links between the two host nations to ensure knowledge and expertise were shared in developing sports infrastructure suitable for use post-Olympics and Games management. The respective governments have supported this exchange, signing a Memorandum of Understanding on the Olympic Legacy earlier this year.

Forward Look

13. Plans to continue the dialogue received comprehensive support from the business communities and the Governments. The committee encouraged further co-operation in trade and investment at the regional level, noting the significant scope for potential development. It agreed to identify permanent leads in both countries for coordination of each workstream in advance of the next meeting of the Deputy Co-chairs early in 2010. The next formal ISC meeting will take place in Russia in 2010.

SC Co-chair (UK) ISC Co-chair (Russia)
Lord Mandelson Alexey Kudrin

VI Session 2002

The 6th session of the UK-Russia Intergovernmental Steering Committee on Trade and Investment (SCTI) was held in London on 15 October 2002. The UK delegation was headed by Patricia Hewitt, Secretary of State for Trade and Industry. The Russian delegation was headed by Alexey Kudrin, Deputy Chairman of the Government of the Russian Federation and Minister of Finance. Officials from both sides also attended.

The following agenda was agreed as the basis for discussion:

Overview of relevant developments in the UK and of Russian economic reform process;
present and future bilateral co-operation;
Actions of Governments, which could promote trade and investment co-operation;
Insurance and guarantee of export and investment by the Export Credits Guarantee Department of the UK;
Multilateral economic co-operation;
Activities of UK-Russia Working Groups of the Steering Committee.

Discussions at the 6th Session of the SCTI were once again held against a background of high-level political contact between the two countries, most notably the recent visit of Prime Minister Blair to the Russian Federation to meet with President Putin. These exchanges had highlighted the importance of developing mutual trade and investment opportunities. The strengthening political ties between the UK and the Russian Federation were seen as important in supporting and facilitating increased co-operation between the business communities of both countries.

The Parties stated that following the 5th Session of the SCTI (October 2000) trade and investment co-operation had continued to grow. Additionally, dialogue between the business communities of both countries had developed positively. However, the Parties agreed that there was scope for improvement in the level of bilateral trade and investment through further development of business-to-business communication. The Parties emphasised the important supporting roles played in this respect by the British Embassy in Moscow, the British Consulates-General in St.Petersburg and Ekaterinburg as well as the Embassy of the Russian Federation and the Trade Delegation of the Russian Federation in the UK.

The Parties recognised that the current growth in the level of bilateral trade and economic activity was promising, but were in agreement that it was important to maximise the potential for future growth in these areas.

The Parties considered ways in which further Government action could stimulate trade and investment co-operation, with the aim of creating for the business communities of both countries a favourable environment in which to exploit trade and investment opportunities.

The Parties discussed areas where steps could be taken by the respective Governments to improve the climate for mutual trade and investment co-operation. In this context the British side raised the following issues: Russian legislation related to production-sharing agreements, restrictions on the import of meat and dairy products from the UK, and copyright protection. The Russian side raised the following issues: anti-dumping restrictions on Russian goods and technical barriers, difficulties encountered by Russian companies wishing to access the UK financial services market, measures to improve investment co-operation.

The co-Chairmen agreed that the SCTI was an appropriate forum for the discussion of ways to improve the climate for the development of mutual trade and investment co-operation. The Parties highlighted the need for the UK and Russian Governments to consider steps to improve access to both markets, where they had the authority to do so, and to encourage communication and co-operation between the business communities of both countries.

Taking account of the need to create favourable conditions from which the business communities of both countries might benefit, the Parties signed the UK-Russia Joint Declaration on Investment Co-operation and agreed to consider what measures may be needed to realise its provisions.

The Parties discussed the position on export credits. The UK side highlighted that the Export Credits Guarantee Department (ECGD) had plenty of capacity for Russian business, dependent on the appropriate security being made available. The Parties acknowledged that it was disappointing that ECGD had not been able to underwrite any new transactions to date. The Parties discussed how to progress further with investment cover and medium and long term cover, so that ECGD might be in a position to underwrite Russian business.

The Parties reaffirmed their commitment to the multilateral world trade system and agreed that it was in the interests of both Parties for Russia to join the WTO as soon as the conditions and terms are right. The British side welcomed the significant progress made so far and were pleased to be able to offer continuing technical assistance to Russia in this matter.

The Parties expressed their confidence that the expansion and intensification of bilateral co-operation will promote further strengthening of relations between Russia and European Union on the basis of the EU/Russia Partnership and Co-operation Agreement and Russian accession to the WTO, leading to the future development of the «Common European Economic Space» between the EU and Russia.

The Parties considered the activities of the SCTI’s Working Groups on Energy, High Technology, Construction and Aerospace and commended each of them on their efforts. Brief written reports on the progress made in each of the Working Groups were made available at the beginning of the Session. The co-Chairmen recommended that the Working Groups should continue to co-operate and to develop further communication with the business communities from both the UK and Russia.

The Parties confirmed that the meetings held within the framework of the SCTI were useful in developing bilateral economic relations and in discussing multilateral economic co-operation issues.

The Parties agreed that in the Spring of 2003 the Deputy co-Chairmen of the SCTI would review progress on the 6th Session and make recommendations as to the timing and venue for the 7th Session of the SCTI, but with the expectation that this would be held in Moscow in the fourth quarter of 2003.