Alexandr Ivanov Conducts a Meeting of the Managing Committee of the UN Global Compact Network in Russia
Vnesheconombank Deputy Chairman – Member of the Board Alexandr Ivanov conducted a meeting of the Managing Committee of the UN Global Compact Network in the Russian Federation on July 23, 2014 at the UN House in Moscow.
In the course of the meeting, A. Ivanov informed the members of the Committee about the changes in the foreign policy of the UN Global Compact. In particular, he noted that national networks would be involved more actively in discussing issues of formulating development goals after the year 2015 as well as in developing solutions of Global Problems of Mankind jointly with governments of various countries.
“One of our top-priority internal tasks is toprepare a package of constitutive documents in order to address an issue of founding the network as an independent legal entity”, said Alexandr Ivanov. He expressed the hope the Draft Charter prepared by Vnesheconombankwould be approved at a general meeting at the end of 2014 and that at the beginning of 2015 the Network would be registered. The Russian Network of the UN Global Compact incorporates 76 member organizations in 13 constituent entities of the Russian Federation and is undertaking its activity in the format of sustainable development.
Under the Memorandum of Understanding signed in March of 2014 with the Office of the UN Global Compact, the Russian Network confirmed its status as an officially recognized organization functioning in line with goals and objectives of the UN Global Compact
The United Nations Global Compact is the largest international initiative in sustainable development and forming global partnership between government and corporate sectors in accordance with ten principles in the areas of human rights, labour, the environment and anti-corruption that gained universal recognition. UN Secretary General Ban Ki-Moon is in charge of the UN GC. More than 10 thousand organizations from 145 world countries including leading foreign financial institutions participate in the UC Global Compact and its primary objective is
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A Briefing by V.A. Dmitriev on Sanctions Imposed by the US Administrationagainst Russian Banks and Companies
Question:Taking into account that fundraising on international capital markets used to be one of main sources of funding VEB activity, how are you going to replace these funds in the current situation and what sort of support are you going to get from the state?
Dmitriev: I’m convinced that in the current situation the state is playing and will play a key role in supporting the banking sector and the banks hit by the sanctions. A Central Bank senior employee has mentioned it today and the Russian Prime Minister spoke about it too and we are feeling this support. This support is as important for us as it has ever been – although since last year,we have been discussing with the Government measures to support VEB for us to pursue the strategy approved by VEB’s Supervisory Board.
But I’d like to stress it once more that in the current situation these measures are even more important. In this respect, mechanisms of the Finance Ministry, the Central Bank and refinancing as well as other ways of supporting Vnesheconombank’s active operationsare to be set into motion.
Of course, we can’t speak without regret about sanctions imposed by the American Administration, they affect both us and our subsidiaries, which include commercial banks. When we are talking about providing support for the banking system and banks hit by sanctions, we naturally mean not only Vnesheconombank but also its subsidiary institutions. The state has sufficient resources to ensure uninterrupted operation of these banks, the more so, the banks that work with private persons, depositors as well as corporate customers. Luckily, we can see that our employees are well balanced despite the fact that they are well informed and that is why there is no commotion in our subsidiary banks – in Svyaz-Bank and GLOBEX BANK, they are operating in a normal mode.
We are of course monitoring the situation but I’d like to call private persons and major customers working with these banks for calm and I also call on them to view the situation soberly, the more so, (I have to touch the wood) sanctions are limited and they are designed to significantly reduce Vnesheconombank’s and its subsidiary institutions’ access to the American borrowing market.
Question: Could you tell us in more detail what specific mechanism will be set into motion for the state to provide support?
Dmitriev: We are considering various options. The Central Bank has already developed methods to support the banking system including long-term credits with a view to their potential extension. I mean credits that will be secured by government guarantees. The system of refinancing is now operating efficiently and we are working together with the Central Bank. I believe that the volume of these transactions will be expanded. The most important thing for us is the state’s support for ensuring funding. At the same time, there are also other support measures. We have an impression that next year a mechanism for redeeming bonds including VEB’s bonds by non-government pension funds will be launched – this is a significant source of long-term money.
We are talking with the Finance Ministry about Vnesheconombank’s activity in the future as a state managing company – we are none the less responsible for managing funds worth 1 trillion 800 billion rubles, half of which are placed in government bonds. These are serious resources for us to think of how we can use them in the interests of the Russian economyю
It goes without saying that we (I mean Vnesheconombank) are drawing conclusions for ourselves from the current situation in which we were involved by the American Administration. It is obvious that the sanctions imposed by it are above all designed to damage our economy. There is no doubt that we are viewed by the American Administration as a serious instrument in accomplishing major objectives. Both American and European measures designed to limit our and Gazprom’s access to capital are of course damaging not only big business we are funding but also regional banks that we are funding through SME Bank ( they are working in their turn with small and medium-sized enterprises; the sanctions also damage our funds created together with foreign partners to provide capital support for our small and medium-sized enterprises.
If all this activity is scaled down, it is sure to narrow the market for funding small and medium-sized enterprises as well as opportunities for forming middle class and ensuring social stability.
My conversations with the Prime Minister and members of VEB’s Supervisory Board today show that we deplore the sanctions but we’ll fulfill all our obligations to small and medium-sized enterprises and regional banks ( not to mention major customers we are funding). No sanctionswill prevent us from doing it - their authors won’t live that long.
Question: Are you going to reconsider the strategy of the Bank for Development in connection with the sanctions?
Dmitriev: We have developed several scenarios of strategies. As far as our lending to the real economy is concerned, we’ll now rely on a conservative approach which will just mean a selective choice of our potential borrowers. We’ll give high priority to landmark, serious projects and refuse projects that could be funded by commercial banks.
Question: Are you going to increase pressure on VEBs debtors specifically those who received credits for the construction of Olympic facilities?
Dmitriev: The Government decision remains unchanged - a moratorium was imposed and it will be in effect until the year 2015. Now we are restructuring our borrowers’ debts, that is, executing judicial documents. By the way, we have discussed this issue at our today’s meeting of VEB’s Supervisory Board. We haven’t discussed and, the more so, made any other decisions.
Question: It turns out that the moratorium won’t be abolished?
Dmitriev: The moratorium won’t be abolished, the borrowers will work in a normal mode. Meanwhile, we’ll monitor their facilities’ conditions, their business and financial performance and consider prospects for making thesefacilities pay back or other scenarios that at the worst will provide for the state’s measures to support either borrowers or Vnesheconombank itself.
Question: Did you take measures to offset sanctions and did you consider the possible ways the situation could develop?
Dmitriev: Yes, we did. If you want peace, prepare for a war.
Question: Are you going to change volumes of foreign borrowings?
Dmitriev: We were forced to make changes, so we’ll substitute foreign borrowings with domestic ones.
Question: Do you know potential volumes of your borrowings?
Dmitriev: You know that volumes of our borrowings depend on our borrowers’ needs. I would also like to say that we’llreview our credit policy.
They discussed major projects funded by the Bank, fulfilling instructions, which were given by VEB’s Supervisory Board as well as the work in mono-cities.
Dmitry Medvedev’s Opening Address:
Vnesheconombank’s Supervisory Board Meeting
Dear distinguished colleagues, today, we are holding VEB’s Supervisory Board regular meeting with a wide range of issues dealing with internal documents, various competitions, reporting on some projects funded by the Bank and fulfilling instructions given by VEB’s Supervisory Board. We are bound to discuss all these issues today.
Moreover, there is also a proposal to make additions to our agenda dealing with the work in mono-cities. This proposal was made by Andrei Belousov. We’ll discuss it now, set our agenda and get down to work.
Origin: Internet-Portal of the Government of the Russian Federation
Vnesheconombank Chairman Participates in the Events Timed to Coincide with the BRICS Heads of State Summit
An annual meeting of heads of partner banks on the BRICS interbank cooperation mechanism timed to coincide with the BRICS Heads of State Summit and a Final BRICS Forum took place in the city of Fortaleza (Brazil). Vnesheconombank Chairman Vladimir Dmitriev participated in these events.
The BRICS Financial Forum’s participants expressed the need to enhance multilateral cooperation, discussed prospects for the interaction of the BRICS interbank cooperation mechanism with a BRICS Bank for Development to be established and spoke for stepping up contacts in interbank cooperation.
Speaking at the Financial Forum Vladimir Dmitriev said that by having ratings in line with sovereign ones, BRICS countries financial development institutions can raise funds on the foreign markets on favorable terms which could be in the future used to address structural problems of national economies.
In the course of the official ceremony at the 6th BRICS Summit, interbank cooperation mechanism member banks signed an Agreement on Cooperation in innovations in the presence of Heads of State. The Agreement provides for the BRICS financing development institutions to support innovation activity and would help to ensure sustainable growth and inflow of investments in infrastructure sectors of economy and in energy efficient and high technology manufacturing sectors.
The BRICS interbank cooperation mechanism was formed as a result of signing a Memorandum on cooperation between BRICS nations’ development and export support institutions dated April 15, 2010.
The Memorandum is mainly designed to promote all-round, long-term, interbank cooperation between partners in order to enhance trade and economic relations between BRICS member nations as well as provide support for socially meaningful and regional projects.
Partners in the Memorandum are the Brazilian Development Bank (BNDES), State Corporation ‘Bank for Development and Foreign Economic Affairs (Vnesheconombank)’, the China Development Bank (CDB), the Export-Import Bank of India, the Development Bank of Southern Africa (DBSA).
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VEB Chairman Vladimir Dmitriev participated in the city of Rome (Italy) on July 4, 2014 in a conference devoted to Group of Twenty countries development banks’ role is ensuring sustainable development of national and regional economies and in the second meeting of G20 countries financial institutions’ heads in the D20 format.
In 2013, VEB acted as an initiator of holding G20 development institutions meetings in the D20 format.
At the last meeting, its participants discussed issues of cooperation between G20 countries development banks, their interaction with international financial institutions, development banks’ role in promoting green projects as well as development banks’ capabilities in raising private long-term investments. In his address, Vladimir Dmitriev announced VEB’s initiative on including representatives of D20 format financial institutions in national delegations to participate in G20 Investment and Infrastructure Working Group meetings. Development banks’ participation in the G20 Working Group is of mutual interest and would contribute to effective funding of long-term projects in close cooperation with international financing institutions, national governments and private long-term capital.This initiative was fixed in the final statement of the D20 meeting’s participants.
VEB Chairman Vladimir Dmitriev met with Co-Chair of the Russian-Italian Forum-Dialogue within Civil Societies Louisa Todini. They identified prospects for promoting and enhancing business, social-humanitarian and cultural cooperation, approved an action plan as part of the Forum-Dialogue as well as agreed to hold a regular annual meeting of the Russian-Italian Forum-Dialogue within Civil Societies in autumn of 2014 in Russia.
VEB’s Chairman participated in a session of the Long-Term Investors Club Coordinating Committee. In the course of the session, its participants discussed the Club’s and its governing bodies’ main lines of activity.
Vladimir Dmitriev met the management of the KfW Banking Group and discussed the project of establishing a Joint Fund to Support Small and Medium-Sized Enterprises and issues of working out conditions for a credit line under the program “Baltica”.
In the course of Group of Twenty –D20 financial development institutions’ events the following documents were signed:
- A Memorandum of Understanding with Italy’s Bank CassaDepositiprestiti (CDP) providing for cooperation between the financing institutions in implementing infrastructure projects and in supporting exports, small and medium-sized enterprises as well as sustainable development;
- A Framework Agreement with Mediabanca against Italian insurance coverage agency SACE;
- A Memorandum of Understanding with the Italian National Agency for Investment Promotion (INVITALIA) designed to enhance cooperation between the parties in implementing projects in various sectors.
Vladimir Dmitriev and President of OJSC United Aircraft Corporation (UAC) Mikhail Pogosyan and Alenia Aermacchi CEO GuiseppeGiordo visited SuperJet International (SJI) a joint venture of OJSC Sukhoi Company and Alenia Aermacchi. They discussed issues of organizing a competitive system of funding export supplies of Russian civil aircraft. A full-flight simulator “Superjeta” was demonstrated. All in all there are three simulators – one is in Venice, the second based on Superjeta - inthe city of Zhukovsky and the third - in Aeroflot company which is actively operating Superjet-100. The simulator can imitate any flight and weather conditions. These simulators are used to trainall Superjet pilots. As of today, 344 pilots have been trained for various world companies operating the Russian aircraft. Three Superjet-100 liners were demonstrated in the customizationcenter of SuperJet International. They are intended for Mexican airline Interjetwhich is already operating 8 similar aircraft. Vnesheconombank participates in a consortium of international banks responsible for extending syndicated loans to fund supplies of 20SukhoiSuperjet 100 aircraft to the Mexican airline.
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