RSPP, VEGAS LEX discuss possibilities to expand localization of manufacturing and Special Investment
VEGAS LEX | View firm profile
On
November 15, 2016, RSPP hosted a conference on ways to localize production
facilities in the Russian Federation and the new tool to stimulate producers,
the Special Investment Contract, organized by RSPP and VEGAS LEX.
On November 15, VEGAS LEX and RSPP
held a conference, Localization of
production in Russia: special investment contracts and other state support
measures. Benefits and prospects for business. The participants discussed
the prospects of development and implementation of SIC* and localization of
production with major industrial enterprises in various branches of economy.
VEGAS LEX Managing Partner Alexander Sitnikovand RSPP Vice-President for Economic Policy and
Competitiveness Maria Glukhova
moderated the conference.
RSPP President Alexander Shokhin
delivered a welcoming speech. “In recent
years, Russia has developed a solid system of measures to support production
and the local production is growing actively,” he said. “Despite the fact that many companies are
already using the appropriate tools, including SIC, businesses still have a lot
of questions. The purpose of the conference is to analyze the results of applying
the policies that stimulate local manufacturing and make adjustments in the requirements
for specific projects entitled to state support, as well as in systemic issues.”
VEGAS LEX Partner, Head of Special
Projects Maxim Grigoryev explained what SIC is and what steps companies need to
make to use it; he listed the advantages that SIC gives the investor, and what
problems face those who decide to use this tool.
Denis Shtirbu,
Head of PPP and infrastructure practice at VEGAS LEX, in his speech drew
attention to the relevance of the issue for the government and the business, to
the difference between SIC and other forms of cooperation between the state and
business, and compared SIC with an investment contract and a PPP agreement.
Michael Ritter, Commercial Director
of СLAAS (Russia), spoke about the process of interaction with all the
participants of the consultations, preparation and signing of the first SIC**
in Russia. He focused on specific practical aspects of the new tool, and
identified the main question that every company that wants to use it should
ask: Why do we need the SIC?
The discussion was also attended by
Director of the Department of Strategic Development and Project Management at
the Ministry of Industry and Trade of Russia Alexey Uchyonov, head of the FAS public services and retail
oversight Timofey Nizhegorodtsev; Head of the Department of Machine
Tool Building and Investment Machine Building at the Ministry of Industry and
Trade of Russia Mikhail Ivanov; CEO of
the Association of European Businesses Frank
Schauff; Director of the Institute of Legal Regulation of HSE Anna Dupan; CCI Vice-President Dmitry Kurochkin; Head of the
Monitoring of Regional Industrial Development Program of the Department of Regional
Industrial Policy at the Ministry of Industry and Trade of Russia Sergey Gorbachev; Deputy Director
General of special economic zone Lipetsk Alexey
Istomin; Head of Siemens Healthineers LLC Svetlana Gerbel; Commercial Director of CLAAS Michael Ritter; Government
Relations and Public Affairs Manager at Sanofi Group Russia Tatyana Smirnova; a leading expert of
the expert-analytical support of the Industrial Policy Department at the
Industry Development Fund Yekaterina Suslennikova.
***
* At the end
of 2014, Russia adopted Federal Law No. 488-FZ, On the Industrial Policy of the
Russian Federation, which introduced a new tool termed a special investment
contract. An SIC is different from concession agreements and other PPP
contracts because here the government does not invest any funds or property in
the project. Under an SIC, investors undertake to create new or modernize
existing production facilities (the object of investment), while the state
agrees to provide the investor with unprecedented privileges, preferences or
other benefits as incentives on the part of the federal government, regions or
municipalities.
** The German
company CLAAS and the Russian Federation have entered into the country's first
federal special investment contract (SIC) prepared by VEGAS LEX. The VEGAS LEX project
team prepared the required documents, and was directly involved in the
negotiations for the conclusion and subsequent implementation of the SIC in the
interests of CLAAS. We analyzed the existing and planned incentives and
government support measures, made significant adjustments to CLAAS business
plan and drafted several alternative SIC projects. The firm also represented
the interests of CLAAS in negotiations with representatives of the Industry and
Trade Ministry, the Ministry of Agriculture, the Industry Development Fund, the
HSE and others.
For more
information on VEGAS LEX’s services and support of investment projects, please
go here.