6 Jun 2023 19:32

Putin instructs that voluntary donations from the sale of foreign industrial assets go to support domestic industry

MOSCOW. June 6 (Interfax) - Voluntary contributions received from the sale by foreign investors of assets in Russia, transactions conducted based on the proposal of the Russian Ministry of Industry and Trade, will be used as a priority to support production through the Industrial Development Fund (IDF), to finance research and development (R&D) and reverse engineering.

The corresponding order from Russian President Vladimir Putin following the meeting of the Presidium of the State Council on April 4 is published on the Kremlin website.

As stated in the document, these are "funds received as a result of the payment of voluntary contributions to the federal budget in transactions for the alienation of assets in the field of industry and trade owned by foreign residents associated with unfriendly states, insofar as contributions are calculated from the amounts of the transactions presented by the Ministry of Industry and Trade of Russia at meetings of the subcommittee of the government commission for the control of foreign investment in the Russian Federation."

These funds will be used to recapitalize the IDF, support research and development activities in order to develop priority industrial products, support reverse engineering programs and programs that provide for the creation of engineering development centers.

The idea to use funds received in the form of a voluntary contribution in this way when foreign investors exit the Russian market (the so-called "exit tax" is at least 5% of the market value of the assets sold) was announced in April during the State Council by Deputy Prime Minister - Head of the Ministry of Industry and Trade Denis Manturov. "It is necessary to strengthen work on R&D and reverse engineering. It is advisable to give additional support to these mechanisms at the expense of part of the proceeds from transactions with foreign businesses, which, as you have already commented, are "not fighters" and are leaving. Also, this source of funds can partially solve the problem of additional financing for the support program of regional funds for industrial development," he said, addressing Putin.