A new law “On Bank for Development” and related laws (amendments to the Tax Code and customs regulation) have been given their third reading in the State Duma and approved. The restated law on the development bank clarifies Vnesheconombank’s goals of implementing investment projects for high-technology industrial production, infrastructure, digital economy development and innovation, providing support for Russian industrial exports and helping Russian industrial producers to expand into foreign markets.
“The draft law passed by the State Duma gives Vnesheconombank new functions and instruments for their performance. The document specifies, first of all, participation in syndicated lending, which is the key mechanism of the project financing factory. The factory’s goal is to encourage investment to industrial production, infrastructure, innovation and the digital economy,” Chairman of the Financial Markets Committee of the State Duma Anatoly Aksakov said.
The new law provides for new functions of Vnesheconombank and instruments for their performance, including:
- mezzanine financing and partner financing are used to attract long-term investment and provide Russian companies with wider access to financial resources in the domestic and foreign markets;
- Vnesheconombank has a leading role in supporting projects of the National Technology Initiative and digital economy projects;
- a separate objective of Vnesheconombank is to help Russian industrial producers to expand into foreign markets, which includes issuing Vnesheconombank with tax and customs guarantees to secure Russian companies’ obligations to pay taxes and customs duties;
- Vnesheconombank’s role is defined for projects implemented by the Russian Federation in the area of promoting international development and integration processes (Eurasian Economic Community, Shanghai Cooperation Organisation, BRICS, One Belt and One Road Initiative);
- Vnesheconombank performs a wider range of expert and analysis activities in order to identify factors in Russian economic growth and search for and select projects consistent with such factors, taking into account their impact on sustainable development and energy efficiency enhancement and private investment in these projects.
The draft of the federal law on amendments to certain legislative acts of the Russian Federation in relation to syndicated loan transactions is aimed at resolving legal uncertainties in respect of the regulation of syndicated loan agreements.
“Streamlining the legal regulation of syndicated loans will increase lending in the real economy and make loans more affordable while reducing credit risks taken by individual lenders. Russian businesses will no longer have to enter into such transactions under foreign law. This will also make Russian jurisdiction more attractive. The draft law additionally amends certain federal laws associated with authorising certain types of economic entities to be syndicate members,” Vnesheconombank’s Deputy Chairman and Member of the Board Alexey Ivanchenko said.
The State Duma passed the draft laws aimed at improving the activities of Vnesheconombank as a development institution unanimously.
The draft of the federal law “On Amendments to the Federal Law ‘On Bank for Development’” was submitted by the Government of the Russian Federation on 14 July 2017, is aimed at improving the activities of Vnesheconombank as a national development institution, building its activities on Russia’s national strategic goals and long-term development priorities and providing regulatory support for the implementation of Vnesheconombank’s approved new Development Strategy until 2021.