16 Mar 2023 16:44

Putin to instruct govt to work out more flexible framework for funds blocked on 'C' accounts

MOSCOW. March 16 (Interfax) - The Russian authorities will work out a more flexible framework for disposing funds that are included in special "C" accounts opened for non-residents from "unfriendly" jurisdictions.

Commenting on a speech that Italian entrepreneur Matteo Vaglica delivered at the Russian Union of Industrialists and Entrepreneurs (RSPP) congress, President Vladimir Putin said that he would issue the corresponding instructions to the government.

Vaglica is general director of Biesse Group LLC, a subsidiary of the Biesse machine tool group based in Italy, which, like other EU countries, is on the Russian list of unfriendly states. Speaking at the congress, he suggested making the procedure for deciding on dividend payments "more predictable" for foreign companies that continue to work and invest in Russia.

"I realize that this [mechanism for blocking funds on type "C" accounts] to a some extent limits the opportunities of our conscientious friends and partners who have worked, are working and want to work further. I agree with you that we should somehow adjust our position," Putin said.

"Today, we probably need to adjust our position. I will ask the government to think it over. [...] Perhaps to think about a more flexible situation, in which it would be possible to pay dividends and free up some of these dividends, some portion, but on the condition that these funds will be allocated, among other things, and maybe primarily, for the development of business within Russia," the president said.

First Deputy Prime Minister Andrei Belousov, who was asked by the president to answer the Italian businessman in more detail, recalled that the restrictions were "were purely reciprocal."

"Secondly, no one prohibits the payment of dividends, they are simply accumulating on "C" accounts now. But it is clear that life is varied, we have quite a few cases when dividends must be freed up just so that a company in Russia can function. A special body has been created for this, there is a commission headed by [Finance Minister] Anton Germanovich Siluanov, representatives of the [presidential] administration, the Bank of Russia, the Economic Development Ministry, which makes such decisions," Belousov said.

"What you're talking about is about establishing more distinctly, as I understand it, the criteria and rules of work, that is, setting more distinct rules by which the corresponding decisions are made. This should probably be done," he said.

He said that later on Thursday the president would hold a meeting with the government.

"There'll be a report on the development of financial markets, and one of the proposals, which has the full backing of both the Finance Ministry and the Bank of Russia, is that we have investors and investments that entered Russia after the start of the special operation, after the sanctions were imposed. And for this kind of investment, we propose to significantly ease the restrictions that are in place today. That is, people came in, already aware of the risks, already in the hostile environment that has emerged. They came here from the so-called unfriendly countries and they are working. For them of course, it would now make sense to administer under strict control, of course - these are all technical issues, to ease [the restrictions]," Belousov said.

"The issue is that if foreigners invest, they could be able to withdraw this money from Russia," Finance Minister Anton Siluanov told reporters, explaining the nature of the changes being discussed.