Moscow To Support Businesses & Employees Impacted By Western Sanctions

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Financial and regulatory support measures introduced to assist business and individuals affected by Western sanctions  

The Moscow government has presented measures to support citizens and businesses in the face of Western sanctions. The priority plan includes the preservation of jobs, ensuring the smooth functioning of enterprises, import substitution and social support for citizens. Other Russian regions are expected to follow suit.

The Russian government and the Central Bank are developing programs to subsidize interest rates on loans to refinance previous obligations, replenish working capital and pay salaries for enterprises that have pledged to keep jobs, in much the same way as many Governments did during the Covid pandemic.

Moscow companies that want to join these programs will receive assistance from the Moscow Small Business Lending Assistance Fund, with the local government working to ensure that loan applications are approved as loyally and quickly as possible. 7 Billion Rubles (@US$89 million) has been allocated from the Moscow city budget to solve these and support employment.

Business complexes in urban Moscow regions will be able to secure long-term contracts for localizing production of products needed by the Russian state. Land plots for the construction of new production facilities can be obtained at a rate of 1 Ruble.

Moscow city authorities are also to launch a program of concessional lending for the purchase of equipment and replenishment of working capital. Representatives of small and medium-sized businesses engaged in import substitution in science, information technology and industry can participate.

500 Million Rubles is to be allocated for the creation of domestic fast food chains, and will take the form of concessional loans. This measure will fill the niche vacated by foreign companies.

Moscow will also help the employees of foreign investors whose owners have exited Russia. Mayor Sergei Sobyanin said that this category of citizens was in the most vulnerable position.

A special personnel centre will be set up on Moscow CBD, tasked with preserving labour collectives. It will interact directly with major employers. If, for objective reasons, an employee is deprived of a job, the centre will help them with further employment. Mechanisms for the retraining of dismissed employees are also being developed.

Other schemes include businesses impacted by sanctions receiving a six month rental abeyance in paying rent for state property. A moratorium will be introduced on the increase in rental rates in 2022 in relation to land plots and non-residential facilities.

Contracting and advance payment under government procurement contracts will be increased up to 70%. The cost of contracts can also be reviewed in the event of an increase in the cost of materials and any depreciation of the Ruble.

The terms for obtaining permanent permits for the entry of freight transport will be reduced, with simplified temporary permits issued to avoid interruptions in the supply of products.

Special attention will be paid to public and corporate consumerism. Entrepreneurs from this industry, food suppliers and the Department of Trade and Services of Moscow are to form a group to stabilise the market and fix prices for groups of goods critical for Russian industry.

An internal food exchange will be organised in the capital, where suppliers will be able to place their offers. Businesses will have to report suppliers who overcharge. Suppliers, in turn, will propose measures aimed at keeping prices for key commodities at the level of  February 20 until May 20, after which prices will not be allowed to increase by more than 5% per month.

Source: NTV

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