CBR supports liberalization of post-March 2022 dividend payments on non-resident investments
MOSCOW. March 17 (Interfax) - Liberalization of the payment of dividends to non-residents on investments in Russia, which they made after March 2022, does not carry risks for inflation and will increase the investment attractiveness of the Russian economy, Elvira Nabiullina, head of the Bank of Russia, said.
"We support this proposal - to liberalize the payment of dividends from those investments that were made after March last year. We do not see any risks from this of volatility, or for inflation, but we believe that this will increase investment attractiveness and give more confidence to investors so they will want to invest in the Russian economy. Now the economy needs investments. It seems to me that this is an absolutely justified, correct decision," she said at a briefing following a meeting of the Board of Directors of the Russian Central Bank.
This proposal was made by the Italian executive Matteo Valica, general director of Biesse Group LLC, a subsidiary of the Biesse machine tool group, at the RSPP congress on Thursday. He proposed that, for foreign companies continuing to operate and invest in the Russian Federation the procedure for making a decision on the payment of dividends should be made "more predictable."
Russian President Vladimir Putin in response promised to instruct the government to work on the issue. "I understand that this, the mechanism for blocking funds on type C accounts, to a certain extent limits the possibilities of our conscientious friends and partners who have worked, are working and want to work further. (...) Today, we should probably correct our position. I will ask the government to think it over.(...) Maybe think about a more flexible situation where it would be possible to pay dividends and withdraw part of them, but on the condition that these funds will be directed, among other things, and perhaps above all, to 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 executive in more detail, recalled that the restrictive measures "were purely tit-for-tat."
"No one has forbidden the payment of dividends; they really just accumulate on C accounts now. However, it is clear that life is diverse, and we have quite a few cases when dividends must be withdrawn simply so that a company in Russia can function. A special structure has been created for this. There is a commission headed by Finance Minister Siluanov, representatives of the presidential administration, the Bank of Russia, and the Economy Ministry which makes these decisions," Belousov said.
"What you're talking about is about establishing more clearly, as I understand it, the criteria and rules by which appropriate decisions are made. Probably, this should be done," Belousov said.
In addition, the Russian authorities are considering the possibility of removing restrictions on the withdrawal of capital for new investments. The proposal was supported by both the Finance Ministry and the Central Bank, and consists of significantly weakening the existing restrictions for investments that entered Russia after February 2022, Belousov said.
"We are talking about the fact that if foreigners invest, they could be able to withdraw this money from Russia," Finance Minister Anton Siluanov told journalists.