The importance of foreign trade relations for the Russian economy cannot be overestimated. In the era of globalization and booming competition, any state understands the need to provide comprehensive assistance to its exporting companies at all stages of the export cycle, from the study of foreign markets, the search for a target segment, the study of logistical issues, to the conclusion and implementation of contracts.
Of course, the pandemic has tremendously changed all of the world’s export support programs and significantly contributed to a decline in international trade. The cancellation of exhibition events and problems related to the transportation of products have also complicated the foreign economic activities of companies.
However, the Government of the Russian Federation and the Russian Export Center (REC) managed to maintain their targets in many positions, thanks to the adoption of timely measures to support exporting enterprises.
By the end of 2020, the volume of support provided by the REC under state programs to exporters reached 7.4 billion US dollars with more than 1,400 companies receiving assistance.
By 2030, according to the state program “Development of Foreign Economic Activity “, the volume of exports of services provided should reach 97.4 billion US dollars. The budget of the state program for the three-year period (2021-2023) is 267 billion rubles, taking into account the expenses for the activities of federal (national) projects, the implementation of which is provided for under the state program (2021 – 85.4 billion rubles, 2022 – 89.2 billion rubles, 2023 – 92.4 billion rubles). The co-executors and participants of the state program are the Ministry of Industry and Trade of Russia, the Federal Customs Service of Russia, Rosaccreditation and JSC “REC”.
The key areas of state support for exports in Russia are the provision of preferential loans, insurance of risks, investments, credit obligations, export factoring on preferential terms, the provision of state guarantees, and simplification of the process of cargo clearance at customs.
The Russian Federation finances the costs of purchasing raw materials and components, and deferred payment insurance is available, which applies not only to commercial, but also to political risks.
The State Institute for Non-Resource Export Support REC, under the management of VEB.RF, consolidates a group of companies that provide Russian exporters with a wide range of financial and non-financial support measures. The Russian Agency for Export Credit and Investment Insurance (EXIAR JSC), ROSEXIMBANK JSC and the School of Export ANO are integrated into the REC Group.
For example, in the line of insurance products of the Russian Agency for Export Credit and Investment Insurance (EXIAR), the most popular assistance to an exporting company is the insurance of receivables. As part of this service, EXIAR covers the risks of non-payment of its customers on receivables for a Russian exporter. As a standard, EXIAR covers 90% of the risks, and 10% is the exporter’s own retention. This is used by both companies in the machine-building sector and companies that produce metallurgical products, fertilizers, agricultural products and food.
Another crucial aid is a loan to the buyer. As part of this program, EXIAR insures financing that banks provide to the buyer of Russian products for the payment for the goods. Depending on the risks involved, such financing is provided either directly to a foreign buyer or through foreign partner banks.
In addition, there is a program to support the foreign registration of trademarks and patents. The program allows not only to compensate for the costs of registration, but also to protect against counterfeiting in foreign markets. Since 2020, there are 4 new support programs: support for foreign registration of trademarks and patents, support for certification and homologation of industrial products, support for certification of agricultural products, support for adaptation and certification of cinematography and IT products.
Despite the lack of opportunities to participate in exhibitions and events, 133 Russian companies signed an agreement to place their products in the tasting pavilions of the REC in Shanghai, Ho Chi Minh City and Dubai. The volume of export contracts concluded with visitors to these pavilions amounted to almost 0.5 billion rubles. For example, bottled mineral water from the Vladikavkaz company is popular in the UAE while canned fish from the Nizhnevartovsk plant has gained serious traction in the Chinese marketplace. Such major market players as Miratorg (a leading producer and supplier of meat) and Makfa (one of the top 5 largest macaroni producers in the world) entered the aforementioned sites. Currently, more than 1,800 companies have entered international marketplaces, with some even having the opportunity to sell their goods directly to the end consumer.
According to the General Administration of Customs of China, in the first four months of 2021, the trade turnover between Russia and China increased by 19.8% year-on-year to $40.207 billion. Of course, an important role was played by the opening of the national store in 2019 on the Chinese online marketplace Tmall.com by the REC, focusing on retail B2C sales. The products are in demand – as at the end of 2020, sales volumes exceeded 270 million rubles. At the moment, active work is being carried out to expand the range of Russian food products on Tmall.com, as well as work on new platforms, including the Chinese app WeChat. Product groups that showed growth last year include: sports and leisure goods, home and interior goods, clothing and shoes and Russian animation.
In addition, an important role is played by a special program aimed at covering up to 80% of the actual costs incurred by manufacturers of civil goods (as well as their affiliated and authorized persons) when transporting their products to foreign markets. The program is valid for organizations that supply their products to foreign markets, if the transportation and shipment of products (from the point/s of departure located within the territory of the Russian Federation to the final destination) was carried out during the period from August 1st, 2020 to July 31st, 2021. The date of shipment of the products by the organization for the purpose of delivery of the products to the buyer under the delivery contract is accepted as the date of transportation.
Of course, one of the most important events of the past year was the launch of the information system “One Window”. The system has become a single entry point for exporters to receive all government services in the field of foreign economic activity. “My Export” is connected to the system of interdepartmental interaction and the Unified Identification and Authentication System (USIA), that is to say, it is part of the ecosystem of state information systems. Exporters no longer need to submit documents to different institutions-once uploaded to the platform, they are used by all involved agencies – the Federal Customs Service, the Federal Tax Service, the Ministry of Industry and Trade, among others as the case may be.
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