Government approves Action Plan for decreasing effect of foreign sanctions on Russian market

In July 2018, the Russian Government approved an Action Plan for decreasing the effect of foreign sanctions on the Russian market. The first results of the Plan will be announced next month. The plan includes various counter measures against sanctions of unfriendly states, including drafting and adoption of new federal laws.

The list of counter measures is divided into five thematic blocks:

1. Foreign economic block includes development of a plan for decreasing the use of the US dollar in foreign trade, as well as adoption of amendments¹ to the Russian Code of Administrative Offences relating to liberalization of liability for violating the Russian currency legislation.

2. Stock market block includes efforts by the Russian Ministry of Finance and the Central Bank aimed at developing ideas for a free market of securities issued by companies under sanctions.

3. Antitrust block is aimed at restricting unfair competition by foreign states, as well as restricting import. The estimated term for implementation is September 2018.

4. The block providing a restriction on access to information on companies potentially subject to sanctions includes adoption of several amendments to the legislation on banks and their activities relating to the procedure for providing information. The estimated term for implementation is August 2018.

5. Development and adoption of a federal law on special administrative districts² that provides for creating “Russian offshores” on the territory of Russky Island (Primorsky Region) and Oktyabrsky Island (Kaliningrad Region). This draft law is developed to establish a more flexible legal regime for foreign legal entities that are residents of a special administrative district, in particular, tax and currency regulation and regulation governing the engagement of foreign labor.

To implement the Plan by the end of July 2018, a work group will be formed in the Russian Government aimed at monitoring the implementation of counter measures against sanctions.

² Draft No.488838-7 of Federal Law “On special administrative districts on the territory of the Kaliningrad Region and Primorsky Region”